See your Money’s Growth with this Calculator: The best thing parents can do for their children is to set aside money for college if they can afford it. If you have time on your side, saving tens of thousands of dollars for school can be more manageable.
This calculator shows what the value of your investments will be by the time your child reaches the age of 18 so you can see how much your child’s college fund can grow over the years.
You can use the calculator by entering a daily investment amount and selecting when you want to start saving: right after your baby is born, or when they are five, ten, or fifteen. To simulate how much your money will grow, you can choose between an investment account with an average annual return of 7% and a high-yield savings account with an average return of 0.8%.
Compound interest – which grows faster than simple interest because it earns interest both on your initial investment and on the interest you accumulate – will illustrate how compound interest can accelerate your money’s growth.
From a four-year perspective, here’s how much a monthly investment of about $300 will be worth at your child’s 18th birthday with a $10 daily investment.
- Birth: $131,686
- Age 5: $77,400
- Age 10: $39,145
- Age 15: $12,186
When it comes to investing in your child’s education, you should start as early as you can because your money will grow faster.
The legendary investor Warren Buffett once likened compound interest to a snowball that grows as it rolls down a hill, and urged investors to take advantage of compound interest as early as possible.