Question

Keisha's parents want to save twenty thousand dollars in her college savings account over the next fifteen 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. Select one: A. two point five percent B. two point seven percent C. ten percent D. twelve percent

Answer 1

The correct answer is C because if you use the simple interest formula I=PRT The interest has to be $8000+X=$20,000 (X=12,000) P stands for the beginning amount of money ($8000) the R stands for the rate (you don't know this for sure yet) and the T stands for the amount of time(15 years) $12,000=$8000(R)(15) $8000(15)=120,000 $12,000=120,000(R)  $12,000/120,000=120,000(R)/120,000 R=0.1 then multiply by 100 to get the percent of 10% therefore C is your answer.