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)
• 5.6%
• 9.6%
• 8.3%
• 8%
To find the percent of the household income that needs to be set aside for the baby's college fund, we first need to calculate the annual amount that needs to be saved.
The total amount needed for the college fund after 18 years is $90,000.
To calculate the annual amount needed, we divide $90,000 by 18:
$90,000 / 18 = $5,000 per year.
Now we calculate the percentage of the household income that $5,000 represents.
The household's net income is $60,000 per year.
To find the percentage, we divide $5,000 by $60,000 and multiply by 100:
($5,000 / $60,000) * 100 = 8.33%.
So the answer is 8.3%.