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Financial literacy activity

Compound Interest Garden

Watch your money grow like a plant! Start with a few coins and see them multiply over time. Stack blocks to see how saving makes your money pile bigger and bigger.

Hands OnAbout 25 minutesScreen-freeParent help expected

Materials and setup

How this changes by age

Pre-K (ages 3–4)

Watch your money grow like a plant! Start with a few coins and see them multiply over time. Stack blocks to see how saving makes your money pile bigger and bigger.

Difficulty 1 of 3

Steps

  1. Give the child 3 blocks and say: 'These are your coins. You are going to save them.'
  2. After 'one month' (wait a minute), add 1 more block: 'Your money grew! The bank added one because you saved.'
  3. After another 'month,' add 1 more. Keep going for 5 rounds.
  4. Count the tower: 'You started with 3 and now you have 8! Your money grew because you left it alone.'
  5. Compare: 'What if you spent your coins instead of saving? You would still have only 0!'

Learning objectives

  • Visualize money growing over time through stacking
  • Understand that saving means your money can increase
  • Compare the result of saving versus spending

Kindergarten (ages 5–6)

Plant a money garden! Saving grows your money a little bit over time. We will just ADD a coin each round — no fancy math. The harder percentage math comes next year.

Difficulty 2 of 3

Steps

  1. Start with 5 coins. Draw a small plant on paper — this is your 'money garden.'
  2. Each round (month), the garden 'grows' by 1 coin. Add a coin and draw the plant a little taller.
  3. After 5 rounds, count: 'You started with 5, now you have 10! Saving grew your money a little bit.'
  4. Notice: we are just ADDING a coin each time. That's all you need to know today.
  5. Discuss: 'Saving your money grows it a little bit. The real way banks do this with percentages — you will learn that next year.'

Learning objectives

  • Track simple additive money growth across multiple rounds
  • Understand that saving grows your money a little bit over time
  • Build readiness for next year's compound-interest math without doing the math yet

Early elementary (ages 6–8)

Explore compound interest with a hands-on experiment. Start with a coin pile, earn interest each round, and watch the growth accelerate. Chart your results and discover why compound interest is called the 'eighth wonder of the world.'

Difficulty 2 of 3

Steps

  1. Start with 100 coins (pennies work great). Each round you earn 10% interest: Round 1 you get 10 coins (10% of 100). Now you have 110.
  2. Round 2: 10% of 110 = 11 coins. Now you have 121. Round 3: 10% of 121 ≈ 12 coins. Now you have 133.
  3. Continue for 10 rounds, writing down the total each time.
  4. Now compare: what if you just earned 10 coins every round (simple interest)? After 10 rounds: 200 coins. With compound: about 259 coins. Compounding wins!
  5. Make a line graph showing both: simple interest (straight line) vs compound interest (curved line).
  6. Discuss: 'Compound interest means you earn interest ON your interest. The longer you wait, the faster it grows.'

Learning objectives

  • Calculate simple percentage-based interest over multiple rounds
  • Compare simple interest (linear growth) to compound interest (accelerating growth)
  • Visualize growth curves using a line graph

Upper elementary (ages 8–10)

Master compound interest through real-world calculations. Use the compound interest formula, compare different rates and time periods, and discover the Rule of 72. Analyze how compound interest works for savings accounts and against you for debt.

Difficulty 3 of 3

Steps

  1. Learn the compound interest formula: A = P(1 + r)^n. P = starting money, r = interest rate, n = number of years, A = final amount.
  2. Calculate: If you save $100 at 5% interest, how much do you have after 1, 5, 10, and 20 years? Use a calculator.
  3. Rule of 72: divide 72 by the interest rate to estimate how many years it takes to double your money. At 6%, money doubles in about 12 years. Test this with the formula.
  4. Compare: $100 saved at age 10 vs $100 saved at age 20, both at 5% until age 60. How much difference does starting 10 years earlier make?
  5. Flip side: credit card debt at 20% interest. If you owe $100 and pay nothing, how much do you owe after 5 years? Why is debt dangerous?
  6. Write a letter to your future self explaining why you should start saving now, using your calculations as evidence.

Learning objectives

  • Apply the compound interest formula to calculate growth over time
  • Use the Rule of 72 to estimate doubling time for investments
  • Analyze how compound interest works both for savings and against borrowers

Safety and evidence note

Read the full activity before beginning. An adult should supervise tools, heat, food, outdoor work, movement, and experiments as appropriate. Completion records that the activity was done; the child’s explanation, work sample, photo, or demonstration is stronger evidence of learning than a completion check alone.

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