Compound interest Math Quiz Online

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The compound interest calculation is very much essential when it comes to the domain of finance such as banking and related fields. The quiz here has questions that ask the child to solve using the concepts of principal and compound interest. The formula to calculate compound interest has to be known to the candidate prior to attempting this quiz and there are various operations that need to be done in the process which covers the topics such as addition, decimals, percentages, the multiplication operations and the division. Most of the kids get confused in the calculation of the compound interest but here with the questions being arranged in a strategic manner, the quiz ensures to give relief from that.

Compound interest for kids

Compound interest is a way for your money to grow faster because it earns interest on the interest that has already been earned. Here’s how it works:

Let’s say you have $100 in a savings account that earns 10% compound interest per year. At the end of the first year, you would have earned $10 in interest because 100 x .10 = 10. So now you have a total of $110 in your account.

The next year, you would earn interest on the $110 that you have in your account. 10% of 110 is $11, so you would earn $11 in interest that year. Now you have a total of $121 in your account.

Each year, the amount of money in your account grows because you are earning interest on the money that you already have, as well as the interest that has been earned in previous years. This is what makes compound interest different from simple interest, where you only earn interest on the original amount of money that you have.

Compound interest can be paid monthly, quarterly, or yearly, and the more often it is compounded, the faster your money will grow. For example, if you have the same $100 in a savings account that earns 10% compound interest per year, but the interest is compounded monthly, you would earn a little bit more money each year because the interest is being added to your account more frequently.

It’s important to start saving and investing as early as possible so that you can take advantage of compound interest. The longer you have your money in an account earning compound interest, the more it will grow. So, if you start saving when you are young, you will have more time for your money to grow, and you will end up with more money in the long run.

It’s also a good idea to save and invest a portion of the money that you earn, rather than spending it all. This will help you build up a strong financial foundation for the future.

In conclusion, compound interest is a powerful tool that can help your money grow faster over time. By saving and investing wisely, you can take advantage of compound interest to build a strong financial future for yourself.