A person receives gifts for her 18th birthday totaling $750. She also saved 5 points $1,500 from her summer job and keeps the

Question

A person receives gifts for her 18th birthday totaling $750. She also saved 5 points $1,500 from her summer job and keeps the money at home in a safe place. She wants to buy a car when she turns 21. She has a part-time job and plans to work full time next summer and save most of that money. She has a monthly cell phone bill and a credit card that she uses for emergencies and then pays the bill in full each month. Which of the following is the most financially wise recommendation for her when it comes to opening bank accounts at this time? 
She should open a checking account with $1,000 and keep the rest of the money in cash at home for emergencies. 
She should put $1,500 in a two-year CD, $600 in a checking or NOW account, and keep $150 in cash. 
She should put $2000 in a five-year CD and open a checking account with the $250 left. 
She should put $750 into a savings account, $1,000 into a checking account, and keep $500 in cash at home for emergencies.

Kunduz · Accepted Answer

Click to see the answer