Definitions:
Age of children - Current age of
your children. This calculator is based on each child
beginning their college education at age 18. The difference
between their current age and 18 is the number of years
you have to save.
Annual tuition - Current estimated
cost of one year of tuition and books. This amount should
be per child and be specific to the school they may
be interested in attending. The cost of college for
the 1998-99 school year, including tuition, room and
board, books, supplies, transportation and other personal
expenses, as reported by the College Board was $10,458
for one year at a four-year public college and $22,533
for one year at a four-year private college.
Room and board - Current estimated
cost of one year room and board. Like tuition and books,
this amount should be per child and specific to the
school they may be interested in attending.
Education cost inflation - This is
the percentage that you expect educational costs to
increase per year.
Current amount - The total amount
you currently have saved for your child's (or children's)
education.
Monthly contributions - The amount
you plan to save per month toward your child's (or children's)
education.
Rate of return - The annual percentage
rate you expect to earn on your educational savings.
The average annual rate of return for the U.S. stock
market has been 11% for the last 75 years. You may wish
to use a more conservative rate of return if your child
is within 10 years of enrolling in school. This calculator
compounds all growth annually.
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