C The Hernandez family is experiencing some financial pressures even though the couple has a

QUESTION

C The Hernandez family is experiencing some financial pressures, even though the couple has a combined income of $66,000. Also, their eldest son, Joseph, will start college in only three years. Maria is contemplating going to work full time to add about $25,000 to the familys annual income. a. How will this change in income affect the familys emergency fund needs? opy and paste your question here
The current income is $66,000, assumed interest rate=10%, number of years=3 Present value of annuity (PVA)=66,000, interest rate=10%, number of years=3 A= PVA*i*(1+i)^n/ [(1+i)^n-1] A= 66000*0.1*(1.1^3)/ (1.1^3 1)= $26,339.58 The above is the annual income the family has before maria takes up a job. If you substitute (66000+25000=91,000) is

esent Value of Annuity A=91000*0.1*(1.1^3)/ (1.1^3 -1)= $36,592.45 The above is the annual income the family has after maria takes up a job If maria earns full time then additional income is 36592.45-26,339.58=$10,252.87 every year

ANSWER:

CLICK REQUEST FOR  AN EXPERT SOLUTION