|
PAYING
THE ANNUAL TUITION TO ATTEND PRIVATE SCHOOL
VS.
SAVING
MONEY BY ATTENDING PUBLIC SCHOOL FOR FREE
&
INVESTING
THE MONEY SAVED
"Do Elite Colleges Produce the Best-Paid Graduates?
"
by Catherine Rampell Tuesday, July 21, 2009
http://finance.yahoo.com/college-education/article/107374/do-elite-colleges-produce-the-best-paid-graduates.html;_ylt=AinO.sX2LU7w3H37_8vsT5S7YWsA?mod=edu-collegeprep
From
Yahoo Finance section provided by The New Yorks Times. Private school tuition can cost anywhere from $10,000 to $25,000* per year. In comparison, public school is
tuition free.According to Andrew J. Coulson, director of Cato Institute’s Center
for Educational Freedom, “[Washington] DC public schools are spending about $24,600 per pupil this school year–roughly
$10,000 more than the average for area private schools.”Source: The Real
Cost of Public Schools. Sunday, April 6, 2008; Page B08. Andrew J. Coulson. http://www.washingtonpost.com/wpdyn/content/article/2008/04/04/AR2008040402921.html
The Real Cost of Public Schools. Posted by Andrew J. Coulson on 04.07.08. http://www.cato-at-liberty.org/2008/04/07/the-real-cost-of-public-schools/*Private school tuition may be as high as $40,000 per year. http://en.wikipedia.org/wiki/Private_schoolIn his blog for Economics and Finance, Dr. Mark J. Perry, professor of economics
and finance in the School of Management at the Flint campus of the University of Michigan, writes that private school tuition
is 1/3 to 1/2 less than public school spending per student. Source: Private
School Tuition: 1/3 to 1/2 Less Than Publics. Carpe Diem. Professor Mark J. Perry’s blog for Economics and Finance.
Sunday, October 28, 2007.
http://mjperry.blogspot.com/2007/10/private-school-tuition-13-to-12-less.html
Table
35 Table 35 compares the cost of tuition to attend private school each year
from Year 10 to 15, using four different annual costs ($10,000, $15,000, $20,000, and $25,000)*.In each of the four examples, the cumulative cost of tuition for each year is calculated by adding the respective
annual cost of tuition to the previous year’s total cost (e.g., $100,000 + $10,000 = $110,000; $110,000 + $10,000 =
$120,000; and so forth).
|
Annual
Tuition
in
$ |
Year
10 |
Year
11 |
Year
12 |
Year
13 |
Year
14 |
Year
15 |
|
10,000 |
100,000 |
110,000 |
120,000 |
130,000 |
140,000 |
150,000 |
|
15,000 |
150,000 |
165,000 |
180,000 |
195,000 |
210,000 |
225,000 |
|
20,000 |
200,000 |
220,000 |
240,000 |
260,000 |
280,000 |
300,000 |
|
25,000 |
250,000 |
275,000 |
300,000 |
325,000 |
350,000 |
375,000 | Note: The calculations in Tables 35 above and 36 below are based on 15 years to cover the number of years
a child may be in school (i.e., Pre-school, Pre-K, Kindergarten, and Grades 1 – 12).* Some private school fees could be lower than $10,000/year and some lot more than $25,000/year.Tables 36 and Table 37 below each show examples of the end values of an investment ($10,000
and $20,000, respectively, from Table 35) that would have been spent on private school tuition from Year 10 to Year 15. In
both tables, a comparison is made between quarterly tuition payments (made four times during the school year) and annual tuition
payments. The calculations for all examples are based on the assumption that the first quarterly tuition payments and the
full annual tuition payments are made at the beginning of the school year. In both tables, the interest rate is 10%, compounded
monthly.NOTE: Tables 36, 37, 38 and 39 below are based on the assumption that the
individual had attended private school for a minimum of 10 years prior to graduating at the age of 18. Previously, the person
may have attended public school or had been home-schooled.
Table
36 Table 36 shows the difference in the approximate end values of a $10,000
investment based on the parameters described above. A comparison is made between quarterly payments of $2,500 each and one
annual payment of $10,000 at 10% rate, and compounded monthly.
|
Total
Years
of
Private
School |
Quarterly
Payments
of
$2,500 Each
|
End
Values*
in
$
if
Invested
at
10%
Compounded
Monthly |
One
Annual
Payment
of
$10,000 |
End
Values**
in
$
if
Invested
at
10%
Compounded
Monthly |
|
10 |
2,500
x 4 |
176,057.09 |
10,000 |
190,091.28 |
|
11
|
2,500
x 4 |
204,877.09 |
10,000 |
219,996.32 |
|
12
|
2,500
x 4 |
236,714.93 |
10,000 |
253,032.81 |
|
13
|
2,500
x 4 |
271,886.61 |
10,000 |
289,528.65 |
|
14
|
2,500
x 4 |
310,741.22 |
10,000 |
329,846.09 |
|
15
|
2,500
x 4 |
353,664.41 |
10,000 |
374,385.28 |
Table
37 Table 37 shows the end values of a one-time investment of the quarterly
and annual end values from Table 36 above. Each of the six examples below represents the number of years (10 to 15) an individual
attended private school, until reaching Age 18, plus 47 years (or to Age 65). For all examples, the interest rate is 10%,
compounded monthly.
|
Total
Years
of
Private School
Until
Age 18
+
47
Years
of
Investing
Thereafter |
One-Time
Investment
of
End Values from Table 36 (Paid Quarterly) |
End
Values
After
47 Years of Investing
at
10%
Compounded
Monthly |
One-Time
Investment
of
End Values from Table 36 (Paid Annually) |
End
Values
After
47 Years of Investing
at
10%
Compounded
Monthly
|
|
10
+ 47
(Started
at Age 8) |
176,057.09 |
18,983,645.13 |
190,091.28 |
20,496,904.74 |
|
11
+ 47
(Started
at Age 7) |
204,877.09 |
22,091,209.01 |
219,996.32 |
23,721,464.83 |
|
12
+ 47
(Started
at Age 6) |
236,714.93 |
25,524,176.44 |
253,032.81 |
27,283,678.67 |
|
13
+ 47
(Started
at Age 5) |
271,886.61 |
29,316,620.65 |
289,528.65 |
31,218,902.61 |
|
14
+ 47
(Started
at Age 4) |
310,741.22 |
33,506,182.84 |
329,846.09 |
35,566,196.86 |
|
15
+ 47
(Started
at Age 3) |
353,664.41 |
38,134,446.36 |
374,385.28 |
40,368,708.23 | Imagine what the total investment would be worth if an individual did not stop investing at age 18 but kept
investing, even a small amount, to Age 65. For example if continue to invest from beginning of the year $1,000.00, $2,000,
$5,000, and $10,000 per year for next 47 years or age 65.This shows in the
Table 38.
Table
38 Line 2 is from last line of the Table 37.
|
Total
Years
of
Private School
Until
Age 18
+
47
Years
of
Investing
Thereafter
|
One-Time
Investment
of
End Values from Table 37 (Paid Quarterly) |
End
Values
After
47 Years of Investing
at
10%
Compounded
Monthly |
One-Time
Investment
of
End Values from Table 37 (Paid Annually) |
End
Values
After
47 Years of Investing
at
10%
Compounded
Monthly |
15 + 47
(Started
at Age 3)
|
353,664.41
|
38,134,446.36
|
374,385.28
|
40,368,708.23
|
If continue to invest from
beginning of the year $1000.00 per year for next 47 years or age 65
|
353,664.41
+ $1,000
yearly for 47 years
|
39,154,630.82
|
374,385.28
+ $1000
yearly for 47 years
|
41,388,892.69
|
If continue to invest from
beginning of the year $2000.00 per year for next 47 years or age 65
|
353,664.41
+ $2,000
yearly for 47 years
|
40,174,815.27
|
374,385.28
+ $2,000
yearly for 47 years
|
42,409,077.14
|
If continue to invest from
beginning of the year $5000.00 per year for next 47 years or age 65
|
353,664.41
+ $5,000
yearly for 47 years
|
43,235,368.64
|
374,385.28
+ $5,000
yearly for 47 years
|
45,469,630.51
|
If continue to invest from
beginning of the year $10,000.00 per year for next 47 years or age 65
|
353,664.41
+ $10,000
yearly for 47 years
|
48,336,290.93
|
374,385.28
+ $10,000
yearly for 47 years
|
50,570,552.80
| If the parents of a 3-year-old had invested (at 10%,
compounded monthly) the money they would have spent ($10,000/year) to send their child to private school for fifteen years,
they would have ended up with $374,385.28. See Table 37 above.If the parents had
made a one-time investment of $374,385.28 at 10%, compounded monthly, for 47 years, they would have ended up with $40,368,708.23.
See Table 37 above.If the parents had invested the $374,385.28 for just 42 years, instead of
47 years, they would have ended up with $24,535,640.31 as oppose to $40,368,708.23.Note
the difference 5 years makes in the amount of money the parents would have ended up in each of the above examples:
$40,368,708.23 for
47 years
- $24,535,640.31
for 42 years
$15,833,067.92 (rounded
up to $16 million) A 5-year less makes a difference of almost $16
million dollars less gain clearly illustrates why POC has been called a miracle!
Table
39 Table 39 shows the difference in the end values of a $20,000 investment
based on the parameters described above for Table 35. A comparison is made between quarterly payments of $5,000 each and one
annual payment of $20,000.
|
Years
of
School |
Quarterly
Payments
of
$5,000 Each
|
End
Values
in
$
if
Invested at
10%,
Compounded
Monthly |
One
Annual
Payment
of
$20,000 |
End
Values
in
$
if
Invested at
10%,
Compounded
Monthly |
|
10 |
5,000
x 4 |
352,114.18 |
20,000 |
380,182.56 |
|
11 |
5,000
x 4 |
409,754.19 |
20,000 |
439,992.64 |
|
12 |
5,000
x 4 |
473,429.86 |
20,000 |
506,065.62 |
|
13 |
5,000
x 4 |
543,773.22 |
20,000 |
579,057.31 |
|
14 |
5,000
x 4 |
621,482.43 |
20,000 |
659,692.17 |
|
15 |
5,000
x 4 |
707,328.82 |
20,000 |
748,770.56 |
Table
40 Table 40 shows the end values of a one-time investment of the quarterly
and annual end values from Table 39 above. Each of the six examples below represents the number of years (10 to 15) an individual
attended school to Age 18, plus 47 years (or to Age 65). For all examples, the interest rate is 10%, compounded monthly.
|
Total
Years
of
Private School
Until
Age 18
+
47
Years
of
Investing
Thereafter |
One-Time
Investment
of
End Values from Table 39 (Paid quarterly) |
End
Values
After
47 Years of Investing
at
10%
compounded
monthly |
One-Time
Investment
of
End Values from Table 39 (Paid annually) |
End
Values
After
47 Years of Investing
at
10%
compounded monthly |
|
10
+ 47
(Started
at Age 8) |
352,114.18
|
37,967,290.26
|
380,182.56
|
40,993,809.48
|
|
11
+ 47
(Started
at Age 7) |
409,754.19
|
44,182,419.09
|
439,992.64
|
47,442,929.67
|
|
12
+ 47
(Started
at Age 6) |
473,429.86
|
51,048,352.88
|
506,065.62
|
54,567,357.35
|
|
13
+ 47
(Started
at Age 5) |
543,773.22
|
58,633,241.30
|
579,057.31
|
62,437,806.30
|
|
14
+ 47
(Started
at Age 4) |
621,482.43
|
67,012,364.61
|
659,692.17
|
71,132,392.63
|
|
15
+ 47
(Started
at Age 3) |
707,328.82
|
76,268,892.72
|
748,770.56
|
80,737,416.46
| As in Table 38 above, imagine what the total investment
would be worth if an individual did not stop investing at Age 18 but kept investing, even a small amount, to Age 65. For example
if continue to invest from beginning of the year $1,000.00, $2,000, $5,000, and $10,000 per year for next 47 years or age
65.This shows in the table 41.
Table
41 Line 2 is from last line of the Table 40.
|
Total
Years
of
Private School
Until
Age 18
+
47
Years
of
Investing
Thereafter
|
One-Time
Investment
of
End Values from Table 40
|
End
Values
After
47 Years of Investing
at
10%
Compounded
Monthly |
One-Time
Investment
of
End Values from Table 40
|
End
Values
After
47 Years of Investing
at
10%
Compounded
Monthly |
|
15
+ 47
(Started
at Age 3)
|
707,328.82
|
76,268,892.72
|
748,770.56
|
80,737,416.46
|
If continue to invest from
beginning of the year $1000.00 per year for next 47 years or age 65
|
707,328.82
+ $1,000
yearly for 47 years
|
77,289,077.18
|
748,770.56
+ $1,000
yearly for 47 years
|
82,777,785.37
|
If continue to invest from
beginning of the year $2000.00 per year for next 47 years or age 65
|
707,328.82
+ $2,000
yearly for 47 years
|
78,309,261.64
|
748,770.56
+ $2,000
yearly for 47 years
|
42,409,077.14
|
If continue to invest from
beginning of the year $5000.00 per year for next 47 years or age 65
|
707,328.82
+ $5,000
yearly for 47 years
|
81,369,815.01
|
748,770.56
+ $5,000
yearly for 47 years
|
85,838,338.74
|
If continue to invest from
beginning of the year $10,000.00 per year for next 47 years or age 65
|
707,328.82
+ $10,000
yearly for 47 years
|
86,470,737.29
|
748,770.56
+ $10,000
yearly for 47 years
|
90,939,261.03
|
|
