However, they are distributed over twenty years of that time and I think the amortization calculator you used assumes it is all paid as a lump sum on year one.
Yes, this is what I assumed. As I note at the end of my previous comment, I took the £150-200,000 figure to represent the present-value cost of having a child, rather than the unadjusted sum of payments that parents are expected to make over a 20-year period. I think I made that assumption because Brian’s own estimates are adjusted for the time value of money. I agree that, if this assumption doesn’t hold in this case, then the cost per parent per year is £3,000 (excluding opportunity costs).
Hi Toby,
Yes, this is what I assumed. As I note at the end of my previous comment, I took the £150-200,000 figure to represent the present-value cost of having a child, rather than the unadjusted sum of payments that parents are expected to make over a 20-year period. I think I made that assumption because Brian’s own estimates are adjusted for the time value of money. I agree that, if this assumption doesn’t hold in this case, then the cost per parent per year is £3,000 (excluding opportunity costs).