Lesson plan · Investing · Lesson 7
Compound Growth in Investing
Reinvesting returns, and what fees and time do over decades.
- 45 minutes
- Grades 9–12
- Intermediate
- Activity: pairs
Objectives
Students will be able to:
- Explain how reinvested returns compound
- Describe dollar-cost averaging
- Show why starting early matters so much
Materials
- Slide deck and a projector
- Worksheet (one per student)
- Compound Growth Calculator (projected, or on student devices)
- Exit ticket slips (bottom of the worksheet)
Key vocabulary
- Dollar-cost averaging
- Investing a set amount on a regular schedule, like $50 every month, no matter what the market is doing. You buy more shares when prices are low and fewer when they're high, and you never have to guess the "right" time.
45-minute agenda
- 0–5 min
Warm-up
Post: “Would you rather invest $10,000 once at age 20, or $200 a month from age 30 to 40 ($24,000 in total)? Guess which is worth more at 65 at a hypothetical 7%.”
Teacher note: The one-time $10,000 at 20 grows to about $231,235. $200 a month from 30 to 40 ($24,000 in) grows to about $198,197. Less money, invested ten years earlier, ends up ahead — time does the work.
- 5–12 min
Direct instruction
Present the lesson slides. Make sure students leave with these points:
- Reinvested returns compound.
- Dollar-cost averaging = invest the same amount on a schedule.
- Starting early is the most powerful move.
- Real returns are uneven and never guaranteed.
Use the “See it” slide ($100 a month until 65, at a hypothetical 7%) to make the idea visual.
- 12–17 min
Worked example
Walk through “The ten-year head start” on the slides. Pause before the result and ask students to predict it.
- 17–22 min
Live demo
Project your own head start from the slides or the Compound Growth Calculator. Change one input at a time and have students call out what they think will happen.
- 22–32 min
The Ten-Year Head Start
Format: pairs · 10 minutes
- Three investors, all at a hypothetical 7% until 65: A invests $100 a month from 15. B invests $100 a month from 25. C invests $200 a month from 35.
- Pairs predict the order, then use the compound growth calculator to check.
- Pairs calculate how much each person contributed and how much was growth.
What to look for: A: $544,807 ($60,000 contributed). B: $262,481 ($48,000). C: $243,994 ($72,000). C put in the most but ends with the least.
- 32–37 min
Check for understanding
Use the question slides — or run them as a Four Corners game. Answers:
- What does reinvesting dividends do? — A. Uses dividend payments to buy more shares, so future returns compound on a bigger base
- What's this strategy called? — C. Dollar-cost averaging
- Starting to invest ten years earlier can matter more than contributing more money later. — True
- 37–42 min
Discussion
- What's one thing you could cut back on to invest $25 a month?
- Why do you think people put off investing until later in life?
- 42–45 min
Exit ticket
Prompt: What is dollar-cost averaging?
Answer: Investing the same amount on a regular schedule, no matter the price.
Differentiation
Common misconception
“I'll invest more later to catch up.” Catching up takes much larger contributions because the early years had the most time to grow.
Support
Use the calculator's chart to point out contributions vs. growth before calculating.
Extension
Find how much C would need to invest each month from 35 to match A at 65, at the same hypothetical 7%.
Homework or make-up work
Students can complete the full interactive lesson — including its knowledge check — at learnwithflc.org/courses/investing/compound-growth. No account needed; progress saves on their device.