Answer:
8.45%
Explanation:
The formula to calculate the rate of interest is:
r = (1/t)(A/P - 1), where
r= Rate of interest
t= Time period: 15 years
A= Accrued amount: 245,000
P= Principal amount: 108,000
Now, you can replace the values to find the rate of interest:
r= (1/15)((245,000/108,000)-1)
r= (0.0667)(2.2685-1)
r= (0.0667)(1.268)
r= 0.0845 → 8.45%
According to this, the answer is that the rate of interst that you must earn to cover the cost of you child's college education is 8.45%.
