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Compound Savings Interest Visualizer MicroSim

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Sample iframe

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<iframe src="https://dmccreary.github.io/personal-finance/sims/compound-interest-visualizer/main.html" height="525px"  scrolling="no"></iframe>

About this MicroSim

This MicroSim teaches how compound interest works. Students can adjust the principal amount, interest rate, and time period to see how their savings grow exponentially over time. The visualization shows the dramatic difference between simple and compound interest.

How to Use

  1. Adjust the Principal slider to set your starting amount
  2. Set the Interest Rate to see different growth scenarios
  3. Modify the Time Period to see long-term vs short-term growth
  4. Watch the graph update in real-time as you adjust parameters

Lesson Plan

Learning Objectives

After completing this activity, students will be able to:

  1. Understand the difference between simple and compound interest
  2. Calculate future value using the compound interest formula
  3. Analyze how small changes in rate or time dramatically affect growth
  4. Apply the Rule of 72 to estimate doubling time

Target Audience

High school students learning about savings and investing.

Prerequisites

  • Basic understanding of percentages
  • Familiarity with exponents

Activities

  1. Exploration: Find the combination that doubles $1,000 in 10 years
  2. Comparison: Compare growth at 3%, 5%, and 7% over 30 years
  3. Application: Calculate what $100/month saved now would grow to by retirement

Assessment

  • Explain why starting early matters so much for savings
  • Calculate the future value of $5,000 at 6% for 20 years
  • Describe the "snowball effect" of compound interest

References

  1. Investor.gov - Compound Interest Calculator - SEC educational resource
  2. Investopedia - Compound Interest - Comprehensive explanation
  3. Khan Academy - Compound Interest - Video tutorials