How To Figure Compound Interest

Do you want the good news or the bad news?

THE good news is that the cost of educating a child from primary school to third level has come down.

The bad news is that the overall sum is still considerable.

Brace yourself for the figure -- €60,000. That is the mammoth amount of money researchers at parent resource Schooldays.ie and Bank of Ireland estimate it takes to educate a child.

Last year, the same researchers put the cost at €70,000, so at least the expense of education has lessened a little.

Totting it all up like that makes the costs seem huge and must make families whose children have yet to enter on to the school system wonder how they will ever afford it.

Of course, these costs are incremental -- you do not have to shell out all that money in advance. It is paid out in dribs and drabs.

However, is nonetheless a huge drain on the family budget.

The research found that the cost of putting a child through primary school was about €10,200.

For secondary school, an outlay of €12,000 is required, with third level costs at €40,400, a figure that includes the recently-hiked registration fee/student contribution fee.

Save now, if you can

The elevated cost of education means that, if you can at all, it makes sense to save. This is especially the case if your child is about to or has just entered the education system.

Many families have no spare cash, but for those that can spare it the monthly child benefit payment from the State provides a good way of putting an education fund together.

Controversially cut again in the last Budget to €140 a month per child, the benefit pay is still a significant sum.

Child benefit is paid to the parents or guardians of children up to the age of 16. It is paid up to the age of 18 for children that are in full-time education.

Putting this money into a deposit account every month for 18 years would generate a tidy sum of almost €50,000, assuming an interest rate of 4.5pc, calculations by the Consumers' Association indicate.

The good news for savers is that all four domestic banks -- AIB, Bank of Ireland, Permanent TSB and EBS -- offer interest rates of more than 4pc if you leave your money on deposit for a year or more.

This is at a time when the European Central Bank rate is 1.5pc.

The power of compound interest becomes your best friend in this situation. That's the good news.

The bad news is that deposit interest retention tax (DIRT) of 27pc has to be taken out of this.

Compound Interest Calculator | SelectCDRates.com - The Leading ...

Compound interest calculator. The compound interest calculator provides users with the opportunity to evaluate different savings options and measure the value of compound interest on their savings. Use the compound interest calculator to display the impact of compound interest on the future value of any interest earning asset or bank account. Compound interest can have a dramatic effect on the growth of an investment regardless of the investment type. The compound interest calculator allows the user to determine how much interest will be paid or accumulated on their investment account or bank account. With the compound interest calculator, investors and savers can measure the impact on their savings by changing the investment time frame, the deposit amount or the interest rate on the account. The compound interest calculator can be used for savings accounts, certificates of deposit, money market accounts and more. The compound interest calculator is a useful tool to display the affect that compound interest has on investments. The calculator can be used to see how much an investment will grow over time based on several factors regarding the amount invested and the rate of interest. The compound interest calculator is also a very useful to compare investment options based on interest rate and time horizon.

Compound interest is interest paid on interest. Three components of compound of interest will work to increase your rate of return, these three components of compound interest that can be calculated and visualized with the compound interest calculator. The key factors that impact compound interest are the interest rate, the frequency of compounding and the amount saved or invested.

Compound interest puts your savings and investments to work harder for you. The increased return from compound interest does not require a change in your investment; your increased returns accumulate automatically. As the compound interest calculator will illustrate, there area actions investors and savers can take to maximize their returns using the gain provided by compound interest.

Taking advantage of compound interest is easy and easy to see with the use of the compound interest calculator. Investors and savers can maximize the power of compounding by altering the rate of return they receive on their investment or by finding an investment that compounds the interest earned more frequently or by changing the amount of money invested and / or the amounts that may be added to the initial investment. To see just how easy it is to increase your returns with compound interest, plug some values in the compound interest calculator and see the changes to the final investment value.

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