The Compound Interest Calculator visually shows the dramatic effect that compounding can have on investments. Adjust the monthly savings, interest rate, and starting age to see how money grows over time.
LESSONS THAT USE THIS INTERACTIVE TOOL
The students will see how compounding returns make investing at a young age pay off.
OTHER RELATED LESSONS
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Grades 6-8, 9-12
To get started, the students will read Lyddie, a novel by Katherine Paterson. The novel is set mainly in Lowell, Massachusetts, in the 1840s. In Lowell the main character, 13-year-old Lyddie Worthen, works six days a week, from dawn until dusk, running weaving looms in a murky dust-and lintfill...
Building on the first two lessons in the series, this lesson deals with savings and interest.
INTERACTIVE TOOL REVIEWS
“The compound interest example need not end at age 63. Today's school children will have to work until at least age 67 to collect full Social Security retirement benefits and are not likely to have a defined benefit pensions.”
“I wish this calculator supported four-digit monthly savings!”
“This calculator is amazing. It helped me do my assignment and it is fun to play with.”
“Who else set the age to 1, and everything else all 9s so you can watch the calculator flip out?”
“How often is interest being compounded? Can it be changed?
EconEdLink: Her is a link to a Wikipedia article on Compound Interest.”
“This calculator is dramatic and makes the point very clearly. Now you need to develop a similar calculator that demonstrates the effect of making the minimum payment on a credit card loan on the amount of interest paid and the time it takes to repay the loan.”
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