Name: ______________________ Date: __________ Partner: ______________________
The rate on this sheet is 5 percent a year so the math is clean. Real savings accounts in 2026 pay from under 1 percent at big banks to about 4 percent at online banks [update].
My guess: $20 a week for 30 years at 5 percent = $__________
Part A: Why save, and where
Three reasons to save, with an example of each:
| Reason | My example |
|---|---|
| 1. A goal | |
| 2. An emergency fund | |
| 3. The future |
Jar versus savings account:
| A jar or a drawer | A savings account | |
|---|---|---|
| Does it grow? | ||
| Is it protected if it is lost or stolen, or the bank fails? | ||
| How easy is it to raid? | ||
| Who can open one? |
Pay yourself first means _________________________________________________________
Part B: Simple versus compound (copy from the slide)
$1,000 at 5 percent.
Simple interest: $50 a year, every year. After 3 years: $1,000 + $150 = $______
Compound interest:
Year 1: $1,000 x 0.05 = $______ interest. End: $______
Year 2: $______ x 0.05 = $______ interest. End: $______
Year 3: $______ x 0.05 = $______ interest. End: $______
The shortcut: $1,000 x 1.05 x 1.05 x 1.05 = $1,000 x 1.05 to the third power = $______
Part C: $20 a week, by hand
$20 a week x 52 weeks = $______ a year. You deposit it at the start of each year. At the end of the year the bank pays 5 percent on everything in the account.
| Year | In the account at the start | Add this year | Balance before interest | The bank pays (5 percent) | End of year |
|---|---|---|---|---|---|
| 1 | $0.00 | $1,040.00 | $1,040.00 | $1,040.00 x 0.05 = $52.00 | $1,092.00 |
| 2 | $1,092.00 | $1,040.00 | $______ | $______ x 0.05 = $______ | $______ |
| 3 | $______ | $1,040.00 | $______ | $______ x 0.05 = $______ | $______ |
| 4 | $______ | $1,040.00 | $______ | $______ x 0.05 = $______ | $______ |
| 5 | $______ | $1,040.00 | $______ | $______ x 0.05 = $______ | $______ |
The jar after 5 years: $1,040 x 5 = $______
The account after 5 years: $______
The difference (the bank paid you this much for waiting): $______
Why does year 5 earn more interest than year 2 when the deposit is the same?
(Grade 6: years 1 to 3, and the jar at 3 years: $3,120.)
Part D: The reveal (copy from the slide)
| Years | The jar | The account at 5 percent | The difference |
|---|---|---|---|
| 5 | $5,200 | $ | $ |
| 10 | $10,400 | $ | $ |
| 30 | $31,200 | $ | $ |
My guess was $__________. The real number was $__________.
Two savers. Nia puts $1,000 in an account at 15 and never adds to it. At 5 percent she has about $11,467 at 65. Cole puts $2,000 in at 35. At 5 percent he has about $8,644 at 65.
Who ended with more? ______ Who put in more? ______ What mattered more, the amount or the years? ______
Part E: My pay-yourself-first plan (three sentences)
- I will save $______ a week (or $______ a month).
- I will keep it in ______________________________ (a jar, a youth savings account with an adult, another place) because ________________________________.
- My first goal for it is ______________________________ by ______________.
Grade 8 stretch
- Redo the five-year table at 3 percent [update] on the back. End of year 5: $______. How much does the rate matter over five years? $______ less.
- Check Nia's number with the shortcut: $1,000 x 1.05 to the 50th power. (Use the calculator's power key.) $______
- Three places for the money [update]: a big bank savings account at 0.5 percent, an online bank at 4 percent, a credit union at 3 percent. Which pays the most? ______ Name two things besides the rate that should decide where the money goes: ______________________, ______________________
Exit card (3-2-1)
3 reasons to save: ________________, ________________, ________________
2 differences between a jar and a savings account: ________________, ________________
1 number: $20 a week for 30 years at 5 percent: $________
Teacher key
Part A: reasons: a goal (a concert ticket, a laptop), an emergency fund (a phone screen, a lost bus pass; for an adult, three to six months of fixed expenses), the future (a car, college, a first apartment, retirement). Jar: no growth; not protected; easy to raid; anyone. Account: pays interest; FDIC or NCUA insured up to $250,000 and the bank replaces a stolen card's losses in most cases; harder to raid (a trip to the bank or a transfer that takes a day); a youth account needs an adult co-owner at most banks. Pay yourself first: the savings amount comes out first, before any spending, ideally automatically.
Part B: simple: $1,150. Compound: year 1 $50, $1,050; year 2 $52.50, $1,102.50; year 3 $55.13, $1,157.63. Shortcut: $1,157.63.
Part C: $1,040 a year.
| Year | Start | Add | Before interest | Interest | End |
|---|---|---|---|---|---|
| 1 | $0.00 | $1,040.00 | $1,040.00 | $52.00 | $1,092.00 |
| 2 | $1,092.00 | $1,040.00 | $2,132.00 | $106.60 | $2,238.60 |
| 3 | $2,238.60 | $1,040.00 | $3,278.60 | $163.93 | $3,442.53 |
| 4 | $3,442.53 | $1,040.00 | $4,482.53 | $224.13 | $4,706.66 |
| 5 | $4,706.66 | $1,040.00 | $5,746.66 | $287.33 | $6,033.99 |
Whole-dollar version (no calculators): interest $52, $107, $164, $224, $287; end $1,092, $2,239, $3,443, $4,707, $6,034. Accept answers within $1 of either version.
Jar: $5,200. Account: $6,033.99. Difference: $833.99. Year 5 earns more because the balance is bigger: the bank pays 5 percent on five deposits plus four years of interest, not on one deposit.
Part D: 5 years $6,033.99 (difference $833.99); 10 years $13,735.05 (difference $3,335.05); 30 years $72,551.18 (difference $41,351.18). Two savers: Nia ended with more; Cole put in more; the years mattered more. Nia's money had 50 years to double about three and a half times; Cole's had 30.
Part E: complete if all three sentences have a number, a place with a reason, and a goal with a date.
Grade 8 stretch: 1. At 3 percent: $1,071.20; $2,174.54; $3,310.98; $4,481.51; $5,687.16. About $347 less than at 5 percent. 2. $11,467.40. 3. The online bank at 4 percent; also decide by fees, minimum balance, whether an adult can co-own it, and whether there is a branch or an ATM nearby.
Exit: any three reasons; any two differences; $72,551.18 (accept "about $72,500").