How to Teach Kids About Compound Interest
Compound interest is often called the "8th wonder of the world". But to a 7-year-old, it just sounds like boring math. Here is how to make it fun.
The "Magic Penny" Concept
Ask your child: "Would you rather have $100 today, or a magic penny that doubles every day for 30 days?"
Most kids will grab the $100 bill. But show them the math:
- Day 1: $0.01
- Day 10: $5.12
- Day 20: $5,242.88
- Day 30: $5,368,709.12
This visualizes the power of Time and Consistency.
How PocketJr Helps
Explaining it is one thing. Experiencing it is another.
In PocketJr, you act as the bank. You can set a monthly "Interest Rate" (e.g., 5% or 10%). Every time your child checks their app, they see their "Free Money" growing just because they didn't spend it.
This gamification turns "saving" from a chore into a high-score game.
Ready to start the simulation?
Create a free bank account for your child in 30 seconds.
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