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Maths Report

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Cost of Private Schooling
Year 12 2020
Table of Contents
Introduction ...................................................................................................................................................................... 2
Aim .................................................................................................................................................................................... 2
Observations and Assumptions ........................................................................................................................................ 2
Observations: ................................................................................................................................................................ 2
Assumptions:................................................................................................................................................................. 2
The Plan............................................................................................................................................................................. 2
Solution ............................................................................................................................................................................. 3
Credit Card Strengths ........................................................................................................................................................ 5
Limitations......................................................................................................................................................................... 5
Personal Loan Strengths ................................................................................................................................................... 5
Limitations......................................................................................................................................................................... 5
Evaluate & Verify .............................................................................................................................................................. 5
Conclusion ......................................................................................................................................................................... 6
Bibliography ...................................................................................................................................................................... 6
Appendices ........................................................................................................................................................................ 6
Uniform Fees ..................................................................................................................................................................... 6
Personal Loan .................................................................................................................................................................... 6
Introduction
Compared to public schools, private school tuition can be a great expense. Private school fees range from
over $63,000 to over $450,000 from pre-school to year 12. Most of the money is spent by parents today on
their children’s future by sending them to an expensive private school. Some private schools are overpriced,
and some may be worth the price for tuition. It will be investigated to see if St. Mary’s College at Ipswich is
worth the money.
Aim
The aim of this investigation is to investigate the expenses of a chosen private school in Queensland, and the
prices involved to finish senior schooling (year 11 and 12) at the chosen school. Options for credit card and
personal loans will also be identified to complete the cost of tuition. Interest will need to be calculated and
graphed over the duration of the loan. The report will need to outline options and considerations so that a
correct decision is made in relation to the best way to cover tuition fees. The findings made need to be put
into a report discussing the choices that are being made.
Observations and Assumptions
Observations:
 It is observed that the cost of fees will include 2 years of senior schooling.
 It is observed that the cost involved will be researched.
 It is observed that total costs of schooling will need to be investigated.
 It is observed that the first month of interest for the credit card loan will be free.
 It is observed that more will need to be payed than the minimum monthly repayment I order to pay
it off in 2 years.
Assumptions:
 It is assumed that fees, uniform, footwear, technological requirements, extracurricular activities and
stationery will be involved in the expenses.
 It is assumed that a personal loan will require interest rates paid over the duration of the loan.
 It is assumed that credit card and personal loan options will be being investigated.
 It is assumed that a spreadsheet will need to be made to calculate the amount that will need to be
paid back.
 It is assumed that $1000 will be enough per month in repayment for the credit card loan.
The Plan
The school being investigated is St. Mary’s College in Ipswich. The information needed to complete the task
will be the amount of interest needing to be payed monthly over a two-year period. Other information
needed to complete this investigation are the cost of attending a private school and many other expenses
discussed below. The expenses that come with private schooling are uniform, footwear, technological
requirements, extracurricular activities and stationery. Technologies used for the report will be an online
calculator and spreadsheets including information. The financial institutions being used are the bank called
Me Bank. Calculations that are required in order to complete this investigation is the amount interest, the
total cost of schooling and the cost of loan and credit card repayment over two years.
Solution
When the interest rate data was compared for the Personal Loan (totals to $2,997) and the compound
interest on the credit card (totals to $219). In order to come to a decision about which loan to choose, the
credit card interest will need to be subtracted from the personal loan interest. So, $2,997 from $219 which
equals to a savings of $2,778. Simple interest is an easy way to calculate the amount of interest charged
onto a loan. Compound interest is interest calculated on the original amount and includes the interest
added over time.
Formula:
Compound = A = P (1 + i) n
Simple interest = I = Pin
Personal Loan
Interest: 15,000 X 0.0999 X 2 = $2,997.
Monthly Repayment: 2,997 / 24 = $124.89.
Credit Card
Feb
0.000
328 X
28 X
1000
=
9.184.
Mar
Apr
0.000 0.0003
328 X 28 X 30
31 X
X 1000
1000
= 9.84.
=
10.16
8.
Total = $109.55 X 2 = $219
May
0.0003
28 X 31
X 1000
=
10.168.
June
0.0003
28 X 30
X 1000
= 9.84.
July
0.000328
X 31 X
1000 =
10.168.
Aug
0.000328
X 31 X
1000 =
10.168.
Sep
0.0003
28 X 30
X 1000
= 9.84.
Oct
0.000
328 X
31 X
1000
=
10.16
8.
Nov
0.000
328 X
30 X
1000
=
9.84.
Dec
0.0003
28 X 31
X 1000
=
10.168.
Credit Card Strengths
No Annual Fee
First Month Interest Free
No High Interest Rate
When the total amount is payed back, any unneeded expenses arise they can be put back onto the credit card.
Limitations
Low 11.99 per annum variable – Limitation
$15,000 available (will have paid off over 2 years)
Temptation to place other expenses on credit card
Personal Loan Strengths
No early repayment fees
Low 9.99 per annum variable
Limitations
Fixed monthly payment
Higher interest rate
Could be penalised for paying it off early
Evaluate & Verify
The credit card and personal loan will need to be compared with monthly payments of $749 for the credit card loan
and $693 for the personal loan. It should be considered that the loan can be paid off earlier. The credit card loan was
paid off a month earlier than the personal loan, except for 0.10c of repayment needed to be paid off. $2778 will be
saved by opting for the credit card loan.
Conclusion
In conclusion, it will cost approximately $15,000 for a student to attend St Mary’s college at Ipswich. Choosing the
credit card loan will have an amount of $. The information such as graphs and tables used indicate that the credit
card will be paid off in 23 months and the personal loan will be paid off in 24 months. By choosing the credit card
option, it will be more flexible with the lower amount of interest ($219) rather than the personal loan with $2,997 of
interest. An amount of $2,778 will be saved by choosing the credit card loan.
Bibliography
https://www.comparethemarket.com.au/credit-cards/card/me-frank-credit-card/
https://www.canstar.com.au/compare/unsecured-personalloans/?profile=Loan&loan_type=Personal+Loan&amount=15000&term=2+years&additional_filter=Unsecured&state
=QLD&provider_link%5B%5D=Yes,+just+compare+results+with+links
https://moneysmart.gov.au/budgeting/compound-interest-calculator
https://www.calculatestuff.com/financial/simple-interest-calculator
https://moneysmart.gov.au/budgeting/compound-interest-calculator
https://www.investopedia.com/terms/s/simple_interest.asp
Appendices
St Mary’s College School Fees
School Fees
Total = $12,470.
Uniform Fees
Uniform Cost
School Fees + Uniform Fees
Personal Loan
Total = $1,010.11.
$12,470 + $1,010.11 = $13,480.11
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