Power of Compound Interest

ObjectiveTo introduce the concept of compound interest to kids.
Description Million Dollar Bill

This is an easy demonstration of the power of compound interest.


1. Printout the lesson and chart on the power of compound interest.

2. Get a penny and write a fake check for one million dollars for each person participating.

3. Gather two or more players. Ask if they would like to be millionaires and explain that they have two options. Option one: they take the check for a million dollars. Option two: they receive double the number of pennies each day for thirty days. For instance, they get one penny today, two tomorrow and so on.

4. Have the players make their choice and then show them days 1-20 ONLY on the chart.

5.Talk about how you go from one penny to $5,242.88 in 20 days. Ask the participants to check the math and then ask them if they would like to keep the option that they chose or change their mind based on the new information.

6. If they decide to change their mind get them to turn in the item they chose and exchange it for the other option; example if they chose the check they exchange it for the penny.

7. Show them the full chart and talk with them about the power of compound interest.




Complete When

Mark this activity as complete when you have used the demonstration with at least two other people and have a good understanding of the power of compound interest.

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Age Range 8    9    10    11    12    13    14    15    16    17    18   
Activity Type Lesson
Tags Logical-Mathematical Intelligence  Money  Investing  Interest 
Last ModifiedRobRob


Reference Reference Note  
Great-West Great-Teachers

This is a very straight forward lesson which effectively illustrates the power of compound interest.

The Power of Compound Interest

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