Jefferson College Savings Portfolio
Section 1: Importance of Saving for College
There are many reasons why it is important to save money for your children to attend college. First and foremost, college education is a large factor in the income levels your children will be likely to earn once they enter the working world. For instance, the average male with only a high school education level will earn an average of $39,117 per year, compared to the $83,819 per year he would earn with a bachelor’s degree or higher. For women, the high school education level would earn them a yearly salary of only $28,537 whereas a bachelor’s degree or higher would gain her an income of $54,078 per year. These are significant income differences, and would primarily define whether your children grew up to be middle class (or higher) or stuck in the low-income or poverty level brackets. The importance of a college education is increasingly overwhelming in today’s society.
In addition to this, children are often unable to qualify for student grants and loans right out of high school because their parent’s income is taken into consideration, as well as many other deciding factors. To further complicate matters, the availability of these loans and grants are becoming harder to find and less are becoming available each year. Considering the difficulty of getting grants and loans, it is important to save for you children’s college education in order to prevent any financial difficulty in getting a good education. It is also important to begin saving as soon as possible due to the fact that college tuitions are constantly rising combined with the length of time it takes to earn enough extra money to put aside for savings. These issues will be explained below.
Section 2: Rising Costs of College Tuition and What It Means For You
The graph below (Appendix A) shows the cost of both public and private college tuition averages over time, starting with the year of 1976. As you can see, the red line is the cost of private college, and its tuition is rising at a fairly high rate over time. The blue line is the cost of public college, and although the amounts of tuition each year is lower, the rate of increase each year is also fairly high.
Using this graph, I was able to estimate the rising cost of college over the next 22 years in order to approximate both the cost of college tuition once your children graduate high school and the costs of tuition for each of the four years they would typically attend. The final year on the graph is 2030, which is the estimated year of your twins’ college graduation. This year shows college tuition costs at approximately $12,000 per year for public colleges and approximately $39,000 per year for private colleges. This is yet another reason to stress the importance of saving for college as soon as possible.
Using the information from this graph, I was able to estimate the cost of both public and private colleges in both the years 2026 and 2030 as follows:
Year Public College Private College
2026 $11,000 $38,000
2030 $12,000 $39,000
Using this information, I calculated that there is a $1,000 difference in the tuition rates of 2026 and 2030 for both types of schools. Assuming that this increase in tuition would happen gradually over the course of the 4 years, the tuition costs would break down yearly according to the following chart:
Year Public College Private College
2026 $11,000 $38,000
2027 $11,250 $38,250
2028 $11,500 $38,500
2029 $11,750 $38,750
2030 $12,000 $39,000
Therefore, the cost of each student to attend college for four years (2027-2030) would be $46,500 for public college or $154,500 for private college. Doubling this amount to account for both children would mean that the tuition for both twins to attend four years of college would be $93,000 for public schools or $309,000 for private schools.
Section 3: How To Save For College Without Breaking the Bank
Using the information you provided for me during our discussion of your savings goals, I was able to estimate two different savings scenarios for you in order to assist you in your goal to save for your children’s college educations. In either case, your money will be deposited on the first of each month into a special college savings account with an interest rate of 9% compounded monthly.
Using the generic equation A(t) = P[1+r/12)^12t-1](1+12r) to calculate the level of interest earned and your overall savings, the following factors would take place:
• A(t) is the amount of money you would have in your savings account at the end of the designated time period (18 years).
• P is the amount of money you would deposit each month
• r is the annual interest rate (written in decimal form, so 9% would be 0.09)
• t is the number of years that the money is kept in the account (therefore, 18)
The two scenarios are as follows:
Scenario 1: If you are able to save a minimum of $120 per month using only Mr. Jefferson’s income.
A(t) = 120[1+0.09/12)^12(18)-1](1+12*0.09)
A(t) = 120[1.0075)^215](134.33)
A(t) = 120[4.985](134.33)
A(t) = $80,356.21
In other words, if you are able to deposit a minimum of $120.00 per month in the savings account every month for the next 18 years, your final amount of savings would total $80,356.21. This would not quite be enough money to send both of your children to attend public college for four years, leaving you approximately $13,000 short of your savings goal. You would need to add additional money to the account in order to raise the amount of savings to be enough to cover their college costs.
Scenario 2: If you are able to save a minimum of $1080.00 per month with both of you earning income.
A(t) = P[1+r/12)^12t-1](1+12r)
A(t) = 1080[1+0.09/12)^12(18)-1](1+12*0.09)
A(t) = 1080[1.0075)^215](134.33)
A(t) = 1080[4.985](134.33)
A(t) = $723,205.85
In other words, if you are able to deposit a minimum of $1080.00 per month into the savings account every month for the next 18 years, your final amount of savings would total $723,205.85. This amount would more than cover the cost of both of your children to attend either public or private college for four years, leaving you with an extra $630,205.85 if they both chose public schools, $414,205.85 extra if they both attended private schools, or $522,205.85 extra if one attended public and one attended private.
Section 4: My recommendation
I would recommend that you follow scenario 2 in order to adequately cover your children’s college needs. In addition to this, the extra money you have in the account would cover additional college-related costs other than tuition, giving your children a total blanket of security and allowing them to attend college with no worries. You could then afford housing and food for each child over the four years, books for their classes, and possibly a new computer and/or car for each of them in addition to spending money while they are away. This would prevent them from needing to hold a job while attending college to cover these additional expenses, and would allow your children the ability to focus completely on their college educations.
Section 5: Conclusion
Please keep in mind that my recommendation to follow scenario 2 and deposit a monthly amount of $1080 into your children’s college savings account would prevent you from needing any additional deposits or being unable to cover their college tuitions. The important thing is knowing that you have the ability to provide them with an education that will not only better them as individuals, but set up the pattern for the rest of their lives, enabling them to gain better jobs with higher pay in addition to the better education and problem solving skills they will have acquired during their college experiences. Thank you for your time and I wish you the best of luck.
Which Soda Is Saltiest?
Purpose of Project: Compare the amount of sodium in a standard serving size (8 oz.) of different brands of soda.
Procedure:
1. Go to the grocery store and choose at least ten different brands of soda. From the nutrition label, write down the serving size and the amount of sodium per serving.
2. Create a table showing the different brands of soda chosen, the serving size of each, and the amount of sodium in each soda per serving.
3. Create a frequency distribution table by placing the grams of sodium for each soda in the first column (20, 25, 30, etc.), and the number of times each level of sodium occurs in the second column (number of occurrences), with the total number of sodas totaled at the bottom. In the third column, calculate the relative frequency by taking the number of occurrences for each soda divided by the total number of sodas to get each soda’s relative frequency. The total relative frequency should then equal one and should be totaled at the bottom along with the total number of sodas.
4. Find the median by taking all twelve sodas’ sodium content levels and placing them in ascending order as follows: 20, 25, 25, 25, 30, 35, 35, 35, 40, 45, 50, 50. Since there is an even number of sodas (12), half of that number would be six. The numbers on either side of that half-way point (35 and 35) get added together and then divided by 2 for a total of 35:
35+35=70; 70/2=35. Therefore, the median is 35.
5. Find the five number summary by first looking at your ascending order of sodium levels again. Your minimum is 20 and your maximum is 50. Your median, which is now your Q₂, is 35. To find the Q₁, you need to look at the ascending numbers again. The first six numbers (from your min to the median) are used to find Q₁ . Take the middle two of those first six numbers-20, 25, 25, 25, 30 and 35- which are 25 and 25, add them together and divide them by two to get the average, which equals 25.
25+25=50; 50/2=25
Therefore, Q ₁ equals 25. To find Q₃, you do the same process with the second half of the ascending numbers (from the medium to the max). Take the middle of those second six numbers- 35, 35, 40, 45, 50, and 50- which are 40 and 45. Then add them together and divide them by two to get the average, which equals 42.5. This means Q₃ equals 42.5.
40+45=85; 85/2=42.5
To find the interquartile range, you simply take Q₁ subtracted from Q₃, which is 42.5 – 25, which equals 17.5.
6. To find the mean, you need to take all twelve of your sodium levels again and add them together as follows:
20+25 +25+25+30+35+35+35+40+45+50+50 = 415
Then, take that number and divide it by the total number of sodas (12) as follows:
415/12=34.58
Your mean is 34.58
7. To find the sample standard deviation, first you need to find the sample mean (ยต). After a lot of complicated math (which I could break down to you upon request), the sample mean works out to be 34.58. (This means that on average, soda contains 34 and a half grams of sodium per serving.) The standard deviation- after more complicated math- then works out as 2.96. (This number is how far each soda varies from one to another in it's sodium content.)
Results
Table of Soda’s Sodium Content per Serving:
Median: 35
Five Number Summary:
Min: 20
Q₁: 25
Q₂: 35
Q₃: 42.5
Max: 50
Interquartile Range: 17.5
Mean: 35.48
Standard Deviation: 2.96
Histogram:
Conclusion:
Overall, this project was fairly easy to execute once the math skills were broken down. Looking at the table, you can see that the soda with the lowest level of sodium was Pepsi, and the highest sodium was in Orange Crush or Barq’s Root beer, which was surprising considering both of these are caffeine free sodas that are popular kid’s choices. Looking at the histogram, however, you find that it is more likely to find sodas in the lower to middle range of sodium levels, around 25 and 35 milligrams per serving being most common. The median sodium level was 35 and the mean sodium level was 35.48 with a standard deviation of only 2.96, so there isn’t a broad range of separation. It seems that based on my data and research; most sodas are fairly average in sodium content and stay in the middle range.
