New Reading Resource: The Power of Compounding—How Time Helps Money Grow

Why do financial experts encourage people to start saving early? A new Page One Economics® article helps students discover the answer through the concept of compound interest.

The reading explains how compound interest allows money to grow exponentially by earning returns not only on the original amount saved but also on previously earned interest. Using real-world examples, including Benjamin Franklin’s famous trust funds, the reading demonstrates how small sums can grow dramatically over time.

Students learn about the three key drivers of compounding: time, rate of return, and contributions. The article compares two savers who invest the same amount at different stages of life, showing how starting earlier can produce significantly larger balances even with fewer total contributions. It also introduces the Rule of 72, a simple method for estimating how long it takes money to double at different interest rates.

By creating a free account on fre.org, you can easily assign this resource to your students using Canvas, Google Classroom, Schoology, Blackboard, or D2L Brightspace. The assignment contains a self-grading, multiple-choice assessment for the convenience of both teachers and students. Our tutorial page will help you get started.  
 
Check out this very “interesting” article by clicking on the link below.