Sura ya 7: Maswali ya Kuokoa na Fedha za Dharura

Which type of account typically offers higher interest rates but requires a higher minimum balance and limits on transactions?

What is the primary purpose of an emergency fund?

What is the real interest rate if the nominal interest rate is 5% and the inflation rate is 3%?

Inflation increases the purchasing power of money over time.

Certificates of Deposit (CDs) offer higher interest rates compared to regular savings accounts but come with penalties for early withdrawal.

Definition

Definition

Arrange these steps in the process of building an emergency fund in the correct order: Assess monthly expenses, Calculate emergency fund target, Create a savings plan, Implement the plan. (put the first step at the top)

Rank the following savings goals from short-term to long-term: Emergency fund, Vacation savings, Retirement savings. (put the shortest-term goal at the top)

How can understanding the impact of inflation on savings influence your financial planning?