A good question to show the power of compounding...of course be sure to tell them that no investment would actually double on a daily basis for 30 days ;) Calculators are not allowed! 

Answer: Starting with a penny and doubling it every day compounds to $10.7 million after 30 days

Day 1: You would have $0.02

Day 2: You would have $0.04

Day 3: You would have $0.08

Day 4: You would have $0.16...

Day 30: You would have $10,737,418.24.

Questions:

• How much would the penny have grown to on Day 29? How much did the value increase between Day 29 and Day 30? 
• Now apply this concept to your own savings...
  • Is it better to start saving early (e.g., starting at age 20 and saving for 30 years) or waiting until your life is more stable (start saving at age 30 and saving for 20 years). Use the example of the penny doubling to explain your answer. 

Here are the ready-to-go slides for this Question of the Day that you can use in your classroom.

Behind the numbers:

Here's the spreadsheet with the calculations. 

----------------

----------------

To receive a Question of the Day in your email inbox, subscribe to the NGPF Blog.

About the Author

Dave Martin

Dave joins NGPF with 15 years of teaching experience in math and computer science. After joining the New York City Teaching Fellows program and earning a Master's degree in Education from Pace University, his teaching career has taken him to New York, New Jersey and a summer in the north of Ghana. Dave firmly believes that financial literacy is vital to creating well-rounded students that are prepared for a complex and highly competitive world. During what free time two young daughters will allow, Dave enjoys video games, Dungeons & Dragons, cooking, gardening, and taking naps.