Small savings can add up! But how much is "small" when it comes to retirement?

Answer: $322 monthly

Questions:

1. How does $322 per month become $1 million, even though you only contributed a total of $154,560?
2. How might your approach to investing in reality might be different from these calculations?
3. What is your biggest takeaway for your own finances from this example? Why?

Click here for the ready-to-go slides for this Question of the Day that you can use in your classroom!

Behind the Numbers (Investor.gov):

Use this calculator to help students understand how compounding can grow their investments. For this problem, we assumed an annual return of 8% over 40 years and that the amount they contribute every month remains constant.

One way to facilitate this activity:

• Students write down their guesses
• Project the investment calculator
• Input a handful of student guesses
• Input the correct answer
• Compare the total contributions to the final investment value

About the Author

Dave Martin

Dave joins NGPF with 15 years of teaching experience in math and computer science. After joining the New York City Teaching Fellows program and earning a Master's degree in Education from Pace University, his teaching career has taken him to New York, New Jersey and a summer in the north of Ghana. Dave firmly believes that financial literacy is vital to creating well-rounded students that are prepared for a complex and highly competitive world. During what free time two young daughters will allow, Dave enjoys video games, Dungeons & Dragons, cooking, gardening, and taking naps.

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