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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

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

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

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CharlotteMaster · Tutor for 5 years

Answer

### 1. Money needed to start a business - sinking fund<br />### 2. Paying utility bills while unemployed - emergency fund<br />### 3. Unexpected plumbing expenses - rainy-day fund<br />### 4. Retirement - 401(k)

Explain

## Step 1: Identify the appropriate savings fund for money needed to start a business.<br />### A sinking fund is typically used to save for a specific purpose or future expense.<br />## Step 2: Identify the appropriate savings fund for paying utility bills while unemployed.<br />### An emergency fund is generally recommended for covering essential expenses during unexpected situations like unemployment.<br />## Step 3: Identify the appropriate savings fund for unexpected plumbing expenses.<br />### A rainy-day fund is ideal for smaller, unplanned expenses like home repairs.<br />## Step 4: Identify the appropriate savings fund for retirement.<br />### A 401(k) is a common retirement savings plan.
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