Question

Tracy and Brett are married. Their current assets $9.243 Their current liabilities $6,921 $4,693 Their monthly non-discretionary expenses Their annual combined income $70,000 Their annual debt payments (excluding monthly housing costs) $22,084 What is Tracy and Brett's emergency fund ratio in months?

A. 1.9695
B. 1.2430
C. 3.1697
D. 1.3355

Answer 1

To calculate Tracy and Brett's emergency fund ratio in months, divide their current assets by their monthly non-discretionary expenses. The correct answer is A. 1.9695.

Step-by-step explanation:

To calculate Tracy and Brett's emergency fund ratio in months, we divide their current assets by their monthly non-discretionary expenses. The formula for the emergency fund ratio is: Emergency Fund Ratio = Current Assets / Monthly Non-Discretionary Expenses.

Using the given information, Tracy and Brett's emergency fund ratio in months is: Emergency Fund Ratio = $9,243 / $4,693 = 1.9695 months. Therefore, the correct answer is A. 1.9695.