An important part of our financial planning is having something in savings. The general rule is we should have three months worth of salary in savings in case we lose our job. That's a lot! Scenario: Your employer is facing some trouble and there's a three month furlough coming in six months. This means you will have your job back and only need to survive for three months without income. This also means that you have six months to save money. For this assignment, you are going to prepare for that layoff. Information - Your take-home pay $46,000 a year and your spouse is a stay at home parent to your two children and cat - You are paid on the 10th and 25th of each month - You have $500 in savings at an interest rate of 4% compounded monthly on the 15 th of each month - Money put in savings after the 15th will not gain interest until the next month - You cannot take anything out of savings until you are furloughed - Your rent is $1000 a month - You spend $800 a month on transportation for you and your spouse (car payment, insurance and gas) - Household expenses (food, utilities, cat litter, miscellaneous necessities) for you, your family and your cat is $850 a month Figure out how you are going to survive the three month furlough! Deliverables (Show all your calculations) A. How much money will you need for the 3 months furlough (expenses)? (10 pts) B. How much money do you make each month? (10 pts) C. How much extra money you have after expenses each month? (10 pts) D. How much interest you can earn off the $500 in savings (use t=0.5 for 6 months, A=P(1+kr)kt (15 pts) E. How much you will put in savings each month. Your answer should align with your answer for letter C. (10 pts) F. How much total interest you will earn on the amount you have added to savings. Remember that you are saving the money each month so the principal each month is different. Compute the interest for each month. (25 points) Examnle: Note use t=1/12 for each month of calculations G. Your conclusion and thoughts on saving for an emergency (20 pts) - What are some considerations you need to make? - What things do you think your family needs to give up to accomplish your savings plan? - After you are back to work, will you continue with this savings plan? Show all your work and be sure all your calculations are accurate