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?
5.6%
8.3%
8%
9.6%
To determine the percent of her household's income that needs to be set aside for the baby's college fund, we need to divide the target amount ($90,000) by the number of years (18) and then divide that by the net income ($60,000) multiplied by 100 to convert it into a percentage.
($90,000 / 18) / ($60,000) * 100 = 8.3%
Therefore, the correct answer is 8.3%.