Victor and Maria Hernandez Need to Save Money Fast

The Hernandez family is experiencing some financial pressures, even though the couple has a combined income of $$88,000.$ Also, their eldest son, Joseph, will start college in only three years. Maria is contemplating going to work full time to add about $$34,500$ to the family's annual income.

How will this change in income affect the family's emergency fund needs?

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How much should they save annually for the next three years if they want to build up Joseph's college fund to $$30,500,$ assuming a $4$ percent rate of return and ignoring taxes on the interest? Round your answer to nearest dollar. $($Hint: Use Appendix A$-3$ or visit the Garman$/$Forgue companion website.$)$ Round Future Value of a series of Equal Amounts in intermediate calculations to four decimal places.

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Given their $25$ percent marginal tax rate, what is the Hernandezes' after$-$tax return on their savings? Round your answer to two decimal places.

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Given their after$-$tax return, how much would they need to save each year? Round your answer to nearest dollar. Round Future Value of a series of Equal Amounts in intermediate calculations to four decimal places.

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What savings options are open to the Hernandezes that could reduce or eliminate the effects of taxes on their savings program?

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