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If youd like to set up an emergency fund that can cover 6-month living expenses,...

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Accounting

If youd like to set up an emergency fund that can cover 6-month living expenses, which is $2,500 per month. You decide to put aside $1000 each year into Vanguard Prime Money Market Fund, which earns you 2% per year.

a) How long will it take you to establish the emergency fund?

b) If you get a gift of $5,000 from your rich aunt today, how much do you need to save each year to get the fund established in 5 years?

Please show your calculation

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