Keisha's parents want to save $25,000 in 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?

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Answer 1 · 2017-04-17T08:10:22

7.5

Here Initial Investment (p) = $10,000. Time (T) = 20 years

Interest (I) = $25,000 - $10,000 = $15,000 and Rate of interest (R) = ?

We know, Simple Interest (I) = PRT/100

#15,000 = [10,000 xxRxx20]/100#

#rArr 2000R = 15,000#

#rArr R = (15,000)/2000 = 7.5#