Kia Ora.
FINANCIAL LITERACY – FIO 3-4
Last week, my class and I were learning about Compound Interest (I’ll be talking about the main thing we did.) — which means that banks pay interest on money in savings accounts, so your money grows. Earning interest on interest already earned is called compound interest. Compound interest makes the capital investment (the money you deposit) grow faster. For this maths activity, I had to buddy up with a classmate and equip a calculator. I worked with my friends but I was practically doing most of the work.
How we worked out adding up onto Connor’s bank (Connor the twin if you seen my last maths blog), was easy. Connor had 1000$ and wanted to save it so he could earn interest in it. That’ll give the opportunity for Connor to have more money to spend later. Hereby is an example of how me and my class worked out on how to add more to his interest:
Down below (I’m referring to the image) is what we had to work out. (yr 1 – 11.) To get the interest of 7% works like this according to how the book explained on how to get interest – $1,000 (the capital) invested at an interest rate of 7% earns $70 the first year. If this $70 interest is added to the capital and reinvested for another year, this makes the capital investment larger. ($1,070), so at the end of the second year, the interest will be even more (1,070 x 0.07 = 74.90).
To get the balance, you have to plus the capital (the 1,000) and the interest (the 70) like for each year obviously the numbers get higher and you have to plus the same year capital and interest in order to get the wanted balance.
Here’s an example that I worked on in my maths book.. (I converted it into a google drawing so you can see it clearly).

Did you learn something new? Comment if you did. If you didn’t, still comment on what you think.
God bless. 🫰
