4. Keisha's parents want to save twenty thousand dollars in her college savings account over the next twenty years. They have eight 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.

2%

3.3%

7.5%

9%

Question

4. Keisha's parents want to save twenty thousand dollars in her college savings account over the next twenty years. They have eight 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.

2%

3.3%

7.5%

9%

anonymous · Answer

I = prt

anonymous · Answer

Simple Interest Equation 	
	I equals p times r times t 	
	Simple interest I is the product of the principal p, the annual interest rate r (written as a decimal), and the time t (in years).

anonymous · Answer

Rearrange that equation and get:
$$r=(I)/(pt)$$ Now we just plug in the values from the question:
$$r=(12000)/(8000 \times 20)$$
$$r=.075=7.5 percent$$