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Finance
Estimate the monthly SIP needed to fund a child's higher education in India, using an education-specific inflation rate that runs well above general inflation.
Two steps. First, today's cost of education is projected forward using education inflation, compounding once per year: future cost = cost today × (1 + education inflation rate)^years. Second, that inflated cost becomes the target future value for a monthly SIP, solved by inverting the standard SIP future-value formula — the level monthly contribution whose monthly-compounding accumulation, at your expected investment return, reaches the target exactly at the end of the horizon. The key assumption to call out explicitly: this calculator defaults education inflation to 10%, materially higher than the ~6% assumed for general CPI-style goals. That gap is real — engineering, medical, and especially study-abroad program costs in India have historically risen faster than headline inflation, driven by rising faculty and infrastructure costs, foreign-exchange exposure for overseas programs, and limited seat supply against growing demand. Using a general inflation rate here would understate the true target. As with every goal-planning calculator, the investment return is held constant for the tenure and the result excludes taxes and fund charges.
Because education costs in India have historically outpaced general CPI inflation. Engineering, medical, and study-abroad program fees have risen faster than headline prices due to rising infrastructure and faculty costs, competitive seat scarcity, and — for overseas programs — currency depreciation on top of the host country's own tuition inflation. Using general inflation (~6%) instead of an education-specific rate (~10% here) would meaningfully under-fund the goal.
Use this one. It defaults to a higher, education-specific inflation rate that better reflects how fast tuition and related costs actually rise, whereas Goal Planning defaults to general inflation suited to non-education goals.
It can model either — just set 'today's cost of education' to your target program's current cost. Study-abroad programs typically cost several times a comparable domestic program, so the required SIP scales accordingly; you may also want to bias the inflation input higher for a foreign-currency-denominated goal.