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?

1st we need to calculate the take-home net monthly income, 2nd deduct 30% expenses then × 5 mos, then last calculate the rates for emergency fund (EF).

1) $4,520.00/month - [4520 × (FICA (7.65%) + federal tax (11.75%) + state tax (8.5%))]
= 4520 - [4520 × 0.279] = 4520 - 1261.08
= 3258.92

2) less 30% expenses every month = 3258.92-(3258.92×0.30) = 3258.92×0.70 = 2281.24,
2281.24 × 5 mos = 11,406.22

3) EF = CD + savings acct
75% of 11,406.22 = 8554.67 in 60-day CD
25% × 11,406.22 = 2851.56 in savings acct

If they want to know what this EF is at a certain point in the future, that should have been asked. Otherwise the beginning total amt of the EF after saving for 5 mos = $11,406.22