Word bank: advantage · double · hypothetical · interest · makes

1. Compound = interest on your interest.
2. Growth depends on amount, rate, and time. Time is your biggest .
3. Rule of 72: 72 ÷ rate ≈ years to .
4. Compounding debt grow too.
5. Calculators show scenarios. Real returns vary and aren't guaranteed.

1. Two friends each put $1,000 into accounts earning the same hypothetical 6% a year, compounded. One leaves it for 10 years; the other leaves it for 30.

   1. Why does the 30-year balance end up more than three times the 10-year balance?

   • A. Interest rates rise the longer you save.
   • B. Later years earn interest on a much bigger balance, including all past interest.
   • C. Banks pay loyalty bonuses after 20 years.
   • D. It doesn't — it's exactly three times.

2. 2. Using the Rule of 72, about how long does it take money to double at 8% a year?

   • A. About 6 years
   • B. About 12 years
   • C. About 9 years
   • D. About 72 years

3. 3. Compound interest only helps you — it can't work against you.

   True/False

4. 4. Which factor in compound growth does a 16-year-old have that someone starting at 40 can't get back?

   • A. Time
   • B. Higher interest rates
   • C. A bigger paycheck
   • D. Guaranteed returns

1. 1. Using the Rule of 72, about how many years does money take to double at 6%? At 9%?

2. 2. $1,000 grows at 10% a year, compounded once a year. What is it worth after 3 years?

1. 1. Alex put in $6,000 and Jamie put in $24,000. Does it feel fair that Alex ends up with more? What does that tell you about time?

2. 2. How could compound interest explain why some people get stuck in credit card debt?