The Interest Tree — Money Square · Investopia
Compound interest means your interest earns more interest. Investopia simulation for ages 10–17 with fictional LeoCoins; not financial advice.
Compound interest means your interest earns more interest. With time, a small seed can grow big.
The Story
If you put in 100 coins at 5% a year, at the end of the first year you have 105. In year two, 5% is worked out on 105, so you have 110.25. The interest starts to earn its own interest.
After 10 years at 5%, 100 becomes about 163. The rule of 72 says at 6% your money doubles in about 12 years. But be careful: compound interest also works in reverse on debts, and a credit card debt left unpaid can grow fast.
Key Ideas
- Simple interest: You only earn interest on the money you put in.
- Compound interest: You earn interest on your money and on the interest you’ve already earned.
- Time: The more time, the more compound interest grows.
- Rule of 72: Divide 72 by the interest rate to work out, roughly, how many years it takes to double your money.
Step by Step
- Plant the seed: your first deposit.
- At the end of the year you get interest.
- You leave the interest in your deposit.
- Next year, interest is worked out on a bigger amount.
- Keep going for years and see your tree grow.
Your Turn
Try the interest tree here: change the years and see the difference between what you put in and what you’d have.
Educational simulation with fictional LeoCoins. Not financial advice and no buy or sell recommendations. Companies in the game are invented. Real money decisions are for adults — talk to a trusted adult.
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