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Neal recently graduated from college. Hes employed by a space exploration company and makes approximately $65,000 per year. His primary goal is to begin saving
Neal recently graduated from college. Hes employed by a space exploration company and makes approximately $65,000 per year. His primary goal is to begin saving for an emergency fund. After looking at his budget, Neal has determined that in the case of a severe emergency, he will need to replace 45% of his annual income. This is a conservative estimate, but Neal believes the amount should be sufficient to pay his rent, car payment, food, utility, and insurance expenses.
- c. If Neal can save $300 per month toward his emergency fund goal, how long it will it take for him to obtain 3 and 6 months of needed expenses, assuming he can earn a 2% rate of return on his savings?
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