A family with annual gross income of 72,000 wants an emergency fund equal to six months of income. How much is required?

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Multiple Choice

A family with annual gross income of 72,000 wants an emergency fund equal to six months of income. How much is required?

Explanation:
Six months of income means half a year. With an annual gross income of 72,000, half of that is 36,000. So the emergency fund should be 36,000. The other amounts correspond to different time spans or bases (three months would be 18,000; ten months would be 60,000; a full year would be 72,000), but six months of income specifically yields 36,000.

Six months of income means half a year. With an annual gross income of 72,000, half of that is 36,000. So the emergency fund should be 36,000. The other amounts correspond to different time spans or bases (three months would be 18,000; ten months would be 60,000; a full year would be 72,000), but six months of income specifically yields 36,000.

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