Personal Finance Lesson: Miracle of Compounding
Lesson Background
Sample Slide from Compounding PowerPoint Presentation
If you have ever been around a high school student, you know they are all about applicability (and you thought they were just all-about Facebook). Meaning that before you tell them anything, you need to convince them how it applies to their life – both now and in the future.
That can be a hard sell if you are teaching, say Biology. Like many students, I dissected animals in high school. Actually, mangled is probably the more accurate term.
15 years later, I can honestly say that knowing what is inside a frog hasn’t helped me much in a practical sense. Kids today are no different. If they feel that what you are talking about doesn’t apply to them, they are likely to tune out.
So, when I introduce my lessons on saving and investing, I guarantee the class that the material will be applicable to each and every one of them.
The lesson I am posting today covers the concepts of simple interest, compound growth, and the Rule of 72. It revolves around a PowerPoint discussion that provides the basics, as well as some eye-opening examples of how the concepts can be applied in real life. It also allows the class the opportunity to practice a few calculations, both manually and using some internet financial calculators (see attached worksheet).
This lesson in compounding lays the foundation for further study. It provides a compelling reason as to “why” we should invest. I will post the lessons and activities that describe “how” to invest later on.
Lesson Resources
PowerPoint Discussion: Magic of Compounding
Student Worksheet: Online Savings Calculators
Website: Millionaire Calculator – Investopedia
Website: Savings Calculator – Dinkytown.net (Need Java to run)
Website: Compounding Interest – Wikipedia
Related posts:
If you would like a key to any of the worksheets posted, drop me a line at travis@travisrmartin.com