Arianna has just had a child. She and her husband's net income is $60,000 a year between them. She has established a savings account for her child that needs to contain $90,000 after 18 years. What percent of her household's income will need to be set aside for the baby's college fund? (1 point)

Question

Arianna has just had a child. She and her husband's net income is $60,000 a year between them. She has established a savings account for her child that needs to contain $90,000 after 18 years. What percent of her household's income will need to be set aside for the baby's college fund? (1 point)

8%

8.3%

9.6%

5.6%

Answer 1

To reach the desired amount of $90,000 in 18 years, Arianna needs to save $90,000 / 18 = $<<90000/18=5000>>5000 per year.

Since Arianna and her husband's net income is $60,000, she needs to save $5,000 / $60,000 = 8.3% of their income.

Therefore, the correct answer is 8.3%.