Define What an Emergency Fund Is and Describe Its Function

question 94

Essay

Define what an emergency fund is and describe its function. If your income is $20,000 per year and living expenses are $1,500/month, how much money should be in the fund?

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Definitions:

Payments

The transfer of money, goods, or services from one party to another as fulfillment of an obligation or settlement of a debt.

Plan

A detailed proposal for doing or achieving something, often outlining objectives, strategies, and actions.

Estopped

A principle that prevents a person from denying or asserting anything to the contrary of that which has been, in the context of the facts of the case, established as the truth.

Agency Relationship

A legal arrangement in which one party (the agent) acts on behalf of another party (the principal).