Saving for Kids College
By: Lillie McMaster
I have $4,375 to invest into my child's college fund. Account A grows 4.5% annually. Account B grows 5.15% anually, but there is a $50 fee to pay upfront. My equations would be:
Account A- f(x)= 4,375(1.045)t
Account B- f(x)= 4,325(1.0515)t
When Its Time For College,
In 18 years, account B will have $1,017 more in it than account A.
Account A- $9,662.09
Account B- $10,679.55
The Smart Decision
Like i said, Account B will have significantly more money in it than account A after 18 years. Obviously, the smart choice would be to go with account B. Even at just 2 years, B has more money in it than A. That $50 fee was basically nothing with the results account B gave.
Wow Much Learning
From this project, I learned that its important to save for college. Also that when thinking about long-term saving, you should pick the one with the best result in the desired years. Because there might be a fee in the beginning, you wont pick it, but check long term before you make any decisions.