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)

Answer 1

To calculate the amount that needs to be set aside each year, divide the desired total amount by the number of years: $90,000 / 18 years = $<<90000/18=5000>>5,000 per year
To calculate the percentage of the household's income, divide the amount set aside each year by the total net income and multiply by 100: ($5,000 / $60,000) * 100 = 8.33%
Arianna and her husband will need to set aside 8.33% of their household's income for the baby's college fund.