I am a 21 year old Canadian who is employed full time. I have no wife or kids nor do I own any property. I have no type of savings set up (investments, CPP, etc.).
Each month I have 400$ leftover after bills and expenses (not including the student loan and savings I'm about to mention).
I have a student loan that requires 14,670 to be paid off in monthly installments at a floating interest rate of 3.7% . It appears I am charged interest daily (assuming this means its compounded daily?) of around 1.50$.
After looking into some mutual funds, a low-mid risk fund managed by TD Bank caught my eye. The fund's average return rate since inception (14 years ago) is 8.84% and a MER of 2.03%. I assume that it's safe to say that it has a return rate of around 6%.
I know that the longer it takes me to pay off my student loan debt, the more interest I will be paying in total. I'm also aware that the more I invest in my mutual fund while I am young, the more money my investment will be worth due to accumulated interest and re-invested dividends.
I have been unable to find a web explanation that addresses my situation.
What is the best possible way to allocate 400$ so that I am paying the least student loan interest while at the same time allowing my mutual fund to grow as fast as possible?
My advanced math skill are quite rusty. I imagine that the solution to this has something to do with systems of equations since it involves two values changing relative to each other.