Question

Jesse estimates that it will cost $300,000 to send his newborn son to a private college in 18 years. He currently has $65,000 to deposit in an account. What simple interest rate would he need so that $65,000 grows into $300,000 in 18 years

Answer 1

Answer:

Simple interest rate (R) = 20% (Approx)

Step-by-step explanation:

Given:

Final amount (A) = $300,000

Number of year (T) = 18

Amount deposit (P) = $65,000

Find:

Simple interest rate

Computation:

interest = Final amount (A) - Amount deposit (P)

interest = $300,000 - $65,000

interest = $235,000

interest = [PRT] / 100

235000 = [(65,000)(R)(18)] / 100

Simple interest rate (R) = 20.085

Simple interest rate (R) = 20% (Approx)