Recurring Monthly Deposits - Compounding Effect

Activity Description

In this engaging simulation activity, students will uncover the remarkable concept of compounding interest and its impact on small recurring monthly deposits. By adjusting variables like monthly contributions and savings duration, students will witness firsthand how their money can grow significantly over time through compounding.

Key Elements of the Activity:

1. Students will experiment with different scenarios, modifying monthly installments and savings durations to observe the effect on the growth of their savings.
2. They will record the interest earned for various savings durations in a table, which will help them analyze the outcomes of their experiments.
3. Students will investigate how adding small extra amounts (e.g., $10 or $20) affects their total interest earned, highlighting the impact of consistent contributions.

This activity promotes critical thinking as students draw conclusions about the power of compounding and the significance of regular contributions in achieving financial goals.

This worksheet is a classroom-ready interactive and dynamic worksheet that just needs a few clicks to assign to your classroom. The worksheet is auto-scored, teachers just need to open the real-time console and monitor the student progress.

Learning Objective

The objective of this activity is to enhance students' understanding of how the duration of an investment affects its growth and the total interest earned. By setting the monthly deposit amount and duration, and observing the graphical representation of their investment growth over time, students will visually grasp the concept of compound interest.

They will fill out a table comparing the same deposit amount over different durations to see the impact of time on return on investment. This hands-on exercise aims to deepen their financial literacy by illustrating the significant benefits of long-term investing and the power of compound interest.

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