Chilren Education Fund Planning

In near future, most people is graduated at least master/PhD as the literacy of the country increase. Education fees is the best benchmark of inflation. And, it is already happened at our neighbor country.


Maxix awares about the important of the education for his child. He starts to plan his one-year old son's education plan. Present speeding on tertiary education, said education fees + Living = 25,000. Let's take 6% p.a. for educational and cost of living inflation.

Educational fees@18 years old = FV(0.06,18-1,0,-25000,0) = $67,319.32 p.a

Total funding for Bachelor, Master, PhD for 8 years university study with 8% fund performance:
= PV((0.08-0.06)/(1+0.06),8,67319.32,0,0)/(1+0.06),begin = $467,510.72

Funding Strategies:
1) Lump sum now investment at the end of the year
PV(0.08,18-1,0,-467510.72,0) = $126,353.63

2) Yearly payment for 18 years
PMT(0.08,18-1,0,-467510.72,0) = $13,852.08

3) Existing Resource 20,000 investment and yearly payment
PMT(0.08,18-1,20000,-467510.72,0) = $11,659.49

Adapted original posting from my facebook note dated 11-Nov-09.