HECS Comparison
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ABCDEFGHIJKLMNOPQRST
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Course costs-$1,250
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Subjects4
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Semesters2
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Years4
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Option 1: Pay upfront
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Discount10%
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Year1234
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Period12345678
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Total paid-$4,500-$9,000-$13,500-$18,000-$22,500-$27,000-$31,500-$36,000
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NPV-$36,000
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Option 2: HECS-HELP
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Annual interest rate4%
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Account balance$36,000
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Year1234Payment
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Period12345678-
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Debt-$5,000-$10,000-$15,000-$20,000-$25,000-$30,000-$35,000-$40,0000
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Account balance36,720.0037,454.4038,203.4938,967.5639,746.9140,541.8541,352.6842,179.742,179.74
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NPV-33,820.26
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Option 2 is more cost effective by:2,179.74
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Option 3: Bit of both
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Annual interest rate4%
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Account balance0
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Periodic expenses$4,500
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Year1234Payment
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Period12345678-
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Debt-$5,000-$10,000-$15,000-$20,000-$25,000-$30,000-$35,000-$40,0000
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Account balance4,500.009,090.0013,771.8018,547.2423,418.1828,386.5433,454.2838,623.36-1,376.64
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NPV-37,376.64
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