Most adults learned about compound interest too late to use it well. A teenager who understands it at fifteen has a fifty-year head start.

The idea

Compound interest means you earn interest on your interest. The first years feel slow. Then the curve bends, and time does most of the work. The same math runs in reverse on credit card debt, which is why we teach both sides in the same week.

In FIN\101 students don’t memorize the formula. They run it: each student starts a simulated portfolio with $1,000 and watches it for twelve weeks, with one year of market time passing every week.

“By week six, nobody asks me why it matters anymore.”

The ten-minute version

At home, take a sheet of paper. Write $100 at the top. Ask your child to add 10% and write the new number below, then repeat from the new number. Stop at twenty lines. Then ask what happens at forty.

The answer is about $4,500. Most teenagers guess $500. That gap is the lesson.

What changes

Parents tell us the same thing every term: their child starts asking where the family’s savings are kept, and why. That question is the start of everything else we teach.