Question
Determine the best type of savings fund for each situation. 401(k) rainy-day fund sinking fund emergency fund money needed to start a business paying utility bills while unemployed unexpected plumbing expenses retirement
Answer
4.3
(303 Votes)
Charlotte
Master · Tutor for 5 years
Answer
### 1. Money needed to start a business - sinking fund### 2. Paying utility bills while unemployed - emergency fund### 3. Unexpected plumbing expenses - rainy-day fund### 4. Retirement - 401(k)
Explanation
## Step 1: Identify the appropriate savings fund for money needed to start a business.### A sinking fund is typically used to save for a specific purpose or future expense.## Step 2: Identify the appropriate savings fund for paying utility bills while unemployed.### An emergency fund is generally recommended for covering essential expenses during unexpected situations like unemployment.## Step 3: Identify the appropriate savings fund for unexpected plumbing expenses.### A rainy-day fund is ideal for smaller, unplanned expenses like home repairs.## Step 4: Identify the appropriate savings fund for retirement.### A 401(k) is a common retirement savings plan.