Education planning is a comprehensive and strategic approach to ensuring that individuals and their families achieve their educational goals. It involves setting clear objectives, identifying the necessary resources, and implementing a plan to attain those goals.
The Education Planning Calculator is a readily accessible online tool designed for simplicity, assisting you in estimating the necessary funds to meet your child's future educational needs. It helps parents figure out how to save money effectively so they can afford to pay for their child's education in the future.
This particular calculator employs the concept of future value, enabling the computation of the accumulated amount necessary to secure funds for your child's higher education. The formula is given below:
FV= PV*(1+r) ^n
Where,
FV= future cost of higher education
PV= current cost of higher education
R= rate of interest
n= Time left for child’s higher education
Let's say your child is currently 6 years old, and you plan for them to start college at the age of 18. This means you have a savings duration of 12 years (18 years - 6 years). The current cost of higher education is ₹10 lakh, and the annual inflation rate for education expenses is estimated at 8%. You also anticipate a return of 12% on your investments.
To calculate the total corpus needed to cover your child's future education expenses, you can use the formula for the future value of investments:
FV= 10,00,000*(1+0.08) ^12The calculator will estimate the future education expenses, taking into account your current education expenses, inflation rate, child’s age, and assumed rate of return on your investment. And it will create a personalized investment plan through SIP as well as a lump sum approach.
