Education Planning Calculator

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Education Planning involves estimating the future cost of education and determining the investment required today to meet that goal, factoring in inflation and expected returns. More info →

Input

Enter education planning details.

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How This Calculator Works

Education costs usually rise faster than general prices. This calculator estimates what your child's education will cost when they need it, then shows how much to invest every month, or as a lumpsum today, to have that amount ready in time.

The Formulas

Future Cost = Current Cost × (1 + Education Inflation)^Years
Lumpsum = Future Cost ÷ (1 + Return)^Years

Years = target education age − child's current age · Monthly SIP = Future Cost ÷ {[(1 + i)ⁿ − 1] ÷ i × (1 + i)}, i = return ÷ 12, n = years × 12

What Each Input Does

Child's Current Age / Target Education Age: The difference is how many years you have to invest.
Current Cost of Education: What the course would cost if it started today.
Education Inflation (%): How fast education costs rise each year.
Expected Market Return (%): The yearly return you expect on your investments.

Step by Step

Today's cost is grown by education inflation for the years until the goal.
Monthly SIP: the future cost is divided by the growth of 1 invested at the start of every month.
Lumpsum: the future cost is discounted back to today at the expected return.

Reading the Result

Monthly SIP or lumpsum – either one alone should fund the goal, if the expected return is achieved.

Quick Example

Child aged 5, education at 18, current cost 1,000,000, education inflation 8%, expected return 12%. In 13 years the cost becomes 2,719,624. You need a monthly SIP of 7,234 or a lumpsum of 623,268 today.