Question of the Day: Would you rather have $1,000,000 or start with a penny and double your money every day for 30 days?

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Oct 11, 2021
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Question of the Day, Investing

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Good question to show the power of compounding...of course be sure to tell them that no investment would double on a daily basis for 30 days;) Calculators not allowed! 

Answer: Starting with a penny and doubling it every day compounds to $10.7 million after 30 days

Day 1: You would have $0.02

Day 2: You would have $0.04

Day 3: You would have $0.08

Day 4: You would have $0.16...

Day 30: You would have $10,737,418.24.

⟶ Check out our complementary activities: INTERACTIVE: The Power of Compounding and the math behind compounding with our activity MATH: The Rule of 72.


Questions:

  • How much would the penny have grown to on Day 29? How much did the value increase between Day 29 and Day 30? 
  • Now apply this concept to your own savings...
    • Is it better to start saving early (e.g., starting at age 20 and saving for 30 years) or waiting until your life is more stable (start saving at age 30 and saving for 20 years). Use the example of the penny doubling to explain your answer. 

Here's the ready-to-go slides for this Question of the Day that you can use in your classroom.

 

Behind the numbers:

Here's the spreadsheet with the calculations. 

 

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About the Author

Mason Butts

After graduating from UCLA with a Master's in Education, Mason spent 5 years as a science educator in a South Los Angeles public high school. He is committed to supporting the holistic growth of all students and empowering them to live a life of relational, academic, and financial success. Now settled in the Bay Area, Mason enjoys facilitating professional developments and partnering with educators as they prepare students for a bright financial future. When Mason is not building curriculum or planning a training, he can be found cycling, trying new foods, and exploring the outdoors.