Question

Keisha's parents want to save twenty-five thousand dollars in her college savings account over the next twenty years. They have ten thousand dollars to use as an initial deposit. What simple annual interest rate do they need to meet their goal? Round your answer to the nearest tenth.
Answer

four point five percent

seven point five percent

five percent

twelve point five percent

Answer 1

I=Prt
If they want to have $25,000, they need to have earned $15,000 in interest.
15000=10000r(20)
15000=200000r
r=15000/200000=0.075 or 7.5%

Answer 2

thank you

Answer 3

no problem