Your gross income is $4,520.00/month. Your deductions are FICA (7.65%), federal tax withholding (11.75%), and state tax withholding (8.5%). Your fixed expenses are 30% of your realized income. You saved 5 months' worth in an emergency fund, placing 75% in a 60-day CD at a 5.25% APR and the rest in a regular savings account at a 3.8% APR. What is the total amount of your emergency fund? How much is in the CD and savings account? How much is the total interest earned between both accounts in 60 days?
First, let's calculate your net income after deductions:
FICA deduction: $4,520 * 7.65% = $345.18
Federal tax withholding: $4,520 * 11.75% = $531.40
State tax withholding: $4,520 * 8.5% = $384.20
Total deductions: $345.18 + $531.40 + $384.20 = $1,260.78
Net income: $4,520 - $1,260.78 = $3,259.22
Fixed expenses: $3,259.22 * 30% = $977.77
Amount saved each month: $3,259.22 - $977.77 = $2,281.45
Emergency fund after 5 months: $2,281.45 * 5 = $11,407.25
Amount in CD: $11,407.25 * 75% = $8,555.44
Amount in regular savings account: $11,407.25 * 25% = $2,851.81
Total amount in emergency fund: $8,555.44 + $2,851.81 = $11,407.25
Interest earned in CD: $8,555.44 * 5.25% * (60/365) = $70.49
Interest earned in regular savings account: $2,851.81 * 3.8% * (60/365) = $14.87
Total interest earned in 60 days: $70.49 + $14.87 = $85.36
Therefore, the total amount of your emergency fund is $11,407.25, with $8,555.44 in the CD and $2,851.81 in the regular savings account. The total interest earned between both accounts in 60 days is $85.36.