College Fund Calculator

A college savings fund grows through a combination of regular contributions and compound interest over many years. The most common vehicle in the United States is the 529 plan, which offers tax-free growth and tax-free withdrawals for qualified education expenses.

Future Value of Regular Contributions formula (annuity): FV = PMT × [((1 + r)ⁿ − 1) / r]

What each variable means:

• FV: future value of the fund at the target date (e.g., when the child turns 18)
• PMT: monthly or annual contribution amount
• r: periodic interest rate (annual rate ÷ 12 for monthly contributions)
• n: total number of contribution periods

Worked example: A parent opens a 529 plan when their child is born and contributes $300/month for 18 years. The fund earns 7% annually (average stock-market-linked return).

r = 7% / 12 = 0.5833% per month n = 18 × 12 = 216 months FV = $300 × [((1.005833)²¹⁶ − 1) / 0.005833] FV = $300 × [(3.5125 − 1) / 0.005833] FV = $300 × [2.5125 / 0.005833] FV = $300 × 430.7 = $129,216

Total contributed: $300 × 216 = $64,800. Investment growth: $129,216 − $64,800 = $64,416, nearly doubling the contributions.

Reference costs (2024–2025):

• Public in-state university: ~$11,000/year tuition + fees
• Public out-of-state: ~$29,000/year
• Private 4-year college: ~$43,000/year
• 4-year total (tuition only): $44,000–$172,000+

529 plan benefits:

• Contributions grow tax-free federally
• Withdrawals for education are tax-free
• Over 30 states offer a state income tax deduction on contributions
• Unused funds can be rolled over to a Roth IRA (up to $35,000 lifetime limit, as of 2024)

Tip: Starting at birth versus age 5 can nearly double the fund at age 18, thanks to compounding. Even small early contributions have a large long-term impact.

Run that as two sums rather than taking it on trust. At $300 a month and 7%, starting at birth gives $129,216 by 18. Starting at five gives $76,000. The extra five years cost $18,000 in contributions and added $53,000 to the fund, so $35,000 of it is pure compounding on money that was in the account early. Nothing you do later buys that back.

Currencies other than dollars

The 529 is a US account and the numbers above are US costs, but the arithmetic on this page is a plain annuity and has no country in it. Switch the currency at the top of the site and the figures follow. The nearest equivalents elsewhere are the UK’s Junior ISA, Canada’s RESP with its government grant, and Australia’s education bonds, all of which take the same calculation with different tax treatment.