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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 :)):

DayAmount
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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