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Paying for a college education (or several of them!) takes planning. The most frequently asked question is "How much do I have to save to pay for college?" To accurately answer this question requires a calculator that is capable of handling multiple cash flows - a series of investments followed by a series of withdrawals. (Typically, college payments are due at the start of each semester and will be made for 3.5 years.) The Time Value of Money Calculator is the financial calculator to use for just such a scenario.

Related: See Saving for College? You May Have More Time than You Think

This example applies to our online    Time Value of Money Calculator. The     C-Value! program for Windows works in a similar way and has a few more features including the ability to save your work.

All users should work through the first tutorial to understand basic concepts about the TVM calculator.

Assumption: We assume that a year of college will cost $30,000. This is a very rough estimate for a four year college based on information from collegedata.com:

In its most recent survey of college pricing, the College Board reports that a "moderate" college budget for an in-state public college for the 2015–2016 academic year averaged $24,061. A moderate budget at a private college averaged $47,831.

Naturally, you can adjust our assumption based on your particular expectations. Also, see below about adjusting for inflation.

To create a savings schedule with an unknown investment amount and a series of withdrawals, follow these steps:

  1. Set "Schedule Type" to "Savings"
    • Or click the [Clear] button to clear any previous entries.
    • The top two rows of the grid will not be empty
    • Delete the 2nd row by selecting it and clicking on the [Delete] button
  2. Set "Rounding" to "Open balance — no adjustment" by clicking on {Settings} {Rounding Options}
  3. In the header section, make the following settings:
    1. For "Calculate Method" select "Normal".
    2. Set "Initial Compounding" to "Daily".
    3. Enter 5.0 for the "Initial Interest Rate".
  1. In row one of the cash flow input area, create a "Deposit" series
    1. Set the "Date" to "July 1, 2016"
    2. Set the "Amount" to "Unknown"
    3. Set the "# Periods" to 258
      • 21.5 years
      • Assumes student born in first half of 2016
    4. Set the "Frequency" to "Monthly"
      • Calculated "End Date" will be "December 1, 2037"
      • Monthly investments stops when student is 21.5 years old
  1. Click on the second row of the cash flow input area. Select "Withdrawal" for the "Series"
    1. Enter the "Date" as "July 1, 2034"
      • The fastest way to set the date is to type the 8 digits
      • Note the overlapping dates - the withdrawals start before the investments stop
    2. Enter the "Amount" as 15,000.00
      • Estimated semester expenses
    3. Use the [Tab] key to move to "# Periods". Set it to 8
    4. Set the "Frequency" to "Semiannually"
      • Assume 8 semester payments 6 months apart
      • Payments start year student is 18

Before calculating, your screen will look like this.

Paying for college setup
Paying for college setup

Above illustrates complex cash flow

  • First withdrawal date is about 3.5 years before last investment
  • Investment frequency is monthly while withdrawal frequency is semiannual
  1. Calculate the unknown. The result is $280.41
    • Invest $280 every month for about 21.5 years at 5.0% and you'll be able to pay for college.
Calculated monthly investment amount
Calculated monthly investment amount
  1. Click the [Schedule] button
    • Schedule clearly shows monthly investments continuing after withdrawals start
College savings schedule

Compare this to the more traditional way of thinking about saving for college. The below calculates the amount you need to save each month with the same assumptions but for one change. This time, we will assume the entire amount needed for the full four years will be available when the student starts their freshman year.


  1. Edit row one's "Deposit" series
    1. Set the "Amount" to "Unknown"
    2. Set the "# Periods" to 216
      • Investment stops after student is 18.0 years old
      • Still assumes student born in first half of 2016
  1. There are no changes for the "Withdrawal" series

Before the calculation, your screen will look like this.

Less complex cash flow

  • Withdrawal date starts after last investment
  • Investment frequency is monthly while withdrawal frequency is semiannual
  1. Calculate the unknown. The result is $310.99
    • As an alternative invest $311 every month for about 18 years at 5.0% and you'll be able to pay for college.

  1. Click the [Schedule] button
    • Monthly investments stop before withdrawals start