The Mathematics of a Long

Term Savings Plan Saving

for College
Benefits and Projected Earnings Over 20 Years
SO, WHAT WILL THE ACTUAL COST OF TUITION
BE IN 20 YEARS?
Estimated Cost of College in 20 years:
In-State Community/Year:
In-State Public/Year
$5,022 2 Years: $10,044
$8,457 2 Years: $16,914
College Cost Inflation Rate*: 6%
Number of Years Attending: 4 Years
Estimated Cost: $39,222.12 for 4 years of attendance
College Cost Calculator
*Cost of living (food, housing) excluded
FINANCIAL PRODUCTS TO GET THE JOB DONE AN
INTEREST COMPARISON
Coverdale Education Savings Plan
Using the Savings Plan Formula


What did I find?
Interest accrual was too low!
Based on the information in the last slide, I would definitely:
$ Move the balance of the account to the Money Market account
once the $10,000 minimum has been reached.
$ Look into other financial products with a higher interest yield
because the interest accrual is very low and not at all what I
expected to see from this type of financial product for long term
savings.
$ Consider speaking to a financial expert about ways to maximize
growth.
FINANCIAL PRODUCTS TO GET THE JOB DONE AN
INTEREST COMPARISON
Roll Over Money Market Account Part One
Using the Savings Plan Formula
*Interest has been accruing in another account for 4 years so I need to
calculate just how much. The minimum for the Money Market Account is
$10,000. *
FINANCIAL PRODUCTS TO GET THE JOB DONE AN
INTEREST COMPARISON
Roll Over Money Market Account Part Twon
Using the Savings Plan Formula

*My new total is $50,064 based on the equation from the last slide. I want to
know the interest accrual based on my new account balance in 16 years.
What did I
find?
Thats Better!!
Its interesting how a few decimal points worth of interest
make a big difference! Over the 20 year term, the higher
yield saving account has earned thousands of dollars
more in interest earned. This is definitely the better way to
go.
Whats the Difference?
We know the interest earned was significantly higher with the Money
Market account but exactly how much?
Parent Poll Common
Practice?
Percentage of Parents Saving For College -
Parental Poll
Election Number
Contributing
Percentage
Yes - State Sponsored 12 44%
Yes Investment
Product
3 11%
Yes - Bank Account 4 15%
Yes - Other (Military) 1 4%
Not Currently 7 26%
Total: 27 100%
Yes - State
Sponsored
44%
Yes -
Investment
11%
Yes - Bank
Account
15%
Yes - Other
(Military)
4%
Not
Currently
26%
Parents Contributing To
Long Term Education
Savings
Conclusion

When it comes to any long term investment, even small
changes in interest make a big difference. If the interest is too
low, the long term accumulate wont be enough to make your
money work for you. You need to really research your financial
options, set clear goals and use the right kind of equations to
achieve your goals. Speaking to a financial advisor was hugely
helpful to me and I will surely be heeding their advice.