Question

Kesha's parents want to save 25,000 in her college savings account over the next 20 years. They have 10,000 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.

A) 4.5%
B) 5.0%
C) 7.5%
D) 12.5%

Answer 1

please help me!

Answer 2

Simple annual interest means that the interest does not compound, you just get the same amount every year. So, they are starting with 10,000, and they want to save 25,000. That means they need an additional 15,000. They have twenty years to get it. That means they need 15,000/20=750/year. 750 is what percent of 10,000?

Answer 3

that would be........ about 12.5% right?

Answer 4

If 750 was 12.5% of 10,000, that would mean that if you multiply 10,000 by 12.5%, you get 750. Is that true?

Answer 5

no the real answer would be this if you divided 10,000 by 750: 13.3 repeated but those above are my only options

Answer 6

You're not dividing 10,000 by 750. You're finding what percent 750 is of 10,000. That means dividing 750 by 10,000, not the other way around.

Answer 7

oops... i knew i did something wrong..... heh ok its 7.5%

Answer 8

Right.

Answer 9

ok thanks! :)