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OK, this one sounds complicated, but it’s really not. It’s a simple question, with a surprising answer. And a great lesson on the power of compound interest, for all of us.   

The activity: 1¢ or $1000?

Ask if your child would rather be given $1,000 a day for 30 days, or start with a 1¢, and double that penny every day for 30 days. Which one would leave them with more money? Work it out at 5 day intervals, then ask if they want to change their mind at each stage!

FYI, what happens is:

Not until day 22 do the 1¢-ers start to beat the $1000-ers.

At the end of the 30 days…

…the 1¢-ers have a whopping $5,368,709.12

…while the $1000-ers have a modest $30,000

Here’s the full breakdown for the 1¢ doubled everyday (the $1000 a day is a bit simpler to work out :)):

Day Amount
1 $0.01
2 $0.02
3 $0.04
4 $0.08
5 $0.16
6 $0.32
7 $0.64
8 $1.28
9 $2.56
10 $5.12
11 $10.24
12 $20.48
13 $40.96
14 $81.92
15 $163.84
16 $327.68
17 $655.36
18 $1,310.72
19 $2,621.44
20 $5,242.88
21 $10,485.76
22 $20,971.52
23 $41,943.04
24 $83,886.08
25 $167,772.16
26 $335,544.32
27 $671,088.64
28 $1,342,177.28
29 $2,684,354.56
30 $5,368,709.12

 

Take it further

Firstly, instead of just revealing the numbers to your kids, you could get them to work it out – a good bit of math homework. Secondly, you could explain how compound interest works, and that effectively is what happens to the 1 cent everyday. Use our Primer on ‘talking about compound interest’ here to help you.

 

Don’t forget: Prizes for sharing

Let us know how you get on, there’s prizes for sharing. Either 1. Leave a comment or pic on this post 2. DM us, or 3. Email us at hello@roostermoney.com with ‘stay at home challenge’ in the subject. Each week we’ll pick 3 lucky winners from everyone that’s shared an update with us and send them a £/$10 Amazon voucher.

Got any more activity ideas?

Please share with us at hello@roostermoney.com and we’ll share as many as we can on social, giving you the credit of course 🙂

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