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Saving for the tuition fee
Financial - Examples for the financial calculators
Thursday, 04 December 2008 16:40

Imagine it is November and in September next year you have to pay the college tuition fee of $ 3000. You can save $ 100 every month but that is not enough. So you will have to earn the remaining amount. You choose to do that during the two weeks Christmas/New Year holiday and in summer, in July and August. So in summer you work two full months and in December you only work two weeks. The bank pays 5.3% interest.

The question is how much you will have to earn to pay the tuition. Fortunately this can be computed using the calculator Save until an Amount Calculator. Below I will explain what you should enter into this calculator for such a computation.

The values for the fields above the horizontal line are in the table below:

Initial amount:0Final amount:3
Initial month:11Interest rate:5.3
Number of months:10

The initial months can be added either by entering the month number or by typing in the name of the month.

If necessary first remove the month "January" below the horizontal line. by pressing its minus sign (-). Enter then "0.1" in the field Amount every month and click then the plus sign (+) behind it. You may also remove the months September and October below the horizontal line by clicking their minus signs.

Now add the months December, Juli and August by clicking the plus sign (+) below the text Add month with amount to be computed.

Now consider the input below the horizontal line again. In the row for December set the weight factor to 0.5 to resemble that you can only work half of the month instead of a full month. The other weight factors can be left equal to one.

Finally click Compute. The result appears below that button: in the months July and August you should earn about $ 786 and in December you should earn half of this amount.

The input data can be exported to HTML via the button Save input to HTML. To import this saved data again go to the tab Input from HTML and follow the instructions in this tab. I have exported the data for this example to HTML and displayed in the field below. You can use this data to quickly import the input data for this example into the calculator.

Een ander voorbeeld bij deze calculator is Sparen voor een auto.