Saving Money Worksheet

Most students have heard the word "interest" before they can actually explain what it does to a dollar sitting in an account. This worksheet is built to fix that. It opens with a warm-up scenario grounded in something every teenager understands, working an hourly wage job to save for a $3,000 purchase, then layers in weekly savings goals, recurring expenses, and percentages before it ever mentions a formula. Once students have felt the tradeoff between spending now and saving for later, the worksheet hands them the simple interest and compound interest formulas and turns them loose on eleven problems that build from a single deposit to comparing accounts, comparing interest types, and calculating a rate of return.

Budget 40 to 45 minutes for the full worksheet. The warm-up scenario runs 10 to 15 minutes on its own since part D asks students to work backward through percentages of a paycheck, and that trips up more students than the interest formulas that come later.

The most common mistake is dropping the exponent in the compound interest formula and treating it like simple interest with extra steps. Watch for students who get question 3 right but then can't explain why compound interest pulls further ahead of simple interest as the number of years grows, as in question 8's fifty-year comparison. Question 9, which asks how long it takes an investment to double a second time, trips up students who assume the second doubling takes the same number of years as the first under compound interest. That instinct is worth addressing directly rather than letting it slide.

Run the warm-up as a full-class discussion before breaking into the groups of 3 or 4 the worksheet calls for. Groups work well for questions 1 through 9 since students can check each other's arithmetic, but have students answer question 11 individually first, since it's an opinion question, before comparing answers as a group.

This activity is from Module 2 of the Rapunzl curriculum, Saving vs. Investing.

Saving Versus Investing

Activity: Interest Rates & The Benefits Of Saving

WORKSHEET

Warm Up Exercise

Before we break out into groups of 3, we are first going to think through a couple exercises about saving and interest rates, which are an added bonus to saving your money.

SCENARIO

A. If someone is working at a job for 40 hours per week, making $15 an hour, how many weeks would they need to save in order to purchase an item that costs $3000? How many months?

B. With the same salary and job requirements as the example above, imagine you must save $50 per week in an emergency savings fund that you cannot spend. How long would you need to work in order to purchase an item that costs $3000? How many months?

C. Imagine in the above example, you must also pay $1500 of monthly expenses, every 4 weeks, beginning with Week 4. How many weeks would you need to save in order to pay your monthly expenses and save $20 per week, but also afford the $3000 item?

D. Calculate the total amount of money you would have earned while working in Question C. What percentage did you save in your emergency funds? What percentage went to monthly expenses? What percentage was spent on the $3,000 item.

Please break into groups of 3 or 4 to work on the next pages of questions. These formulas are incredibly important for these questions we have prepared about saving and interest rates. Remember to check these formulas if you have any issues. After talking with your group, feel free to ask your instructor if you have any questions.

IMPORTANT FORMULAS

Calculating Simple Interest

𝐴 = 𝑃 (1 + (𝑅 𝑇))

Calculating Compound Interest

𝐴 = 𝑃 * (1 + 𝑅)𝑇

A: New Amount

P: Initial Amount

R: Annual Interest Rate

T: Time In Years

Saving Versus Investing

Activity: Interest Rates & The Benefits Of Saving

WORKSHEET

Q1: Kyle invested $2,000 at a 6% simple interest rate. Write the equation that gives the total amount A, in dollars, Kyle will receive when he sells the bond after T years. Then calculate how much money Kyle will receive after 3 years.

Q2: An investor decides to offer a business owner a $20,000 loan. The simple interest rate of the loan is 5% per year. Find the total amount in dollars, the investor will receive when the loan is repaid after 5 years.

Q3: Jonas has a high-yield savings account that earns 3% interest compounded annually. If his initial deposit is $1000, find the value of the deposit after 10 years.

Q5: Using the example above, how much would Jonas’s deposit be worth if the account offered simple interest instead of compound interest?

Q6: Jay puts an initial deposit of $400 into a bank account that earns 5 percent interest each year, compounded annually. Find the value of the deposit after 4 years. Then find the difference if the bank only offered simple interest.

Q7: Daniel has $1000 in a checking account and $3000 in a savings account. The checking account earns him 1 percent interest compounded annually. The savings account earns him 6 percent interest compounded annually. Assuming he leaves both these accounts alone, how much will each account be worth after 3 years?

Q8: Kristen opens a bank account with $1,000 that earns 4% interest each year, compounded annually. How much is Kristen’s account worth after 50 years? How much is it worth after 100 years if the interest is simple interest?

Q9: Say that you have an investment with compounding interest which doubles in value in 10 years. How long will it take for the investment to double a second time? Is this answer the same if you use simple interest?

Q10: When Paige first invested, she invested $1,000. Next year, the investment was worth $1,300. What was her percentage rate of return?

Q11: If a bank offered you simple interest or compound interest, which would you take?

Teacher Notes

Look for whether students can articulate, in their own words, why compound interest grows faster than simple interest, not just whether they get the right final number. The warm-up section is where a lot of the real learning happens even though it looks the simplest. Watch for students who skip straight to guessing on part D's percentage breakdown instead of working from the total dollar amount they calculated in part C.

Two discussion prompts worth raising with the class: First, ask students why a bank might prefer to advertise its interest rate as compounded rather than simple. Second, ask them to connect the warm-up scenario back to the formulas, specifically how "time" in the formulas relates to how long they'd have to work and save in the warm-up.

For an extension, have students look up the actual interest rate on a real savings account or CD and recalculate question 3 using that rate instead of 3%.

The answer key for this activity, along with the other activities in this module, is in the Rapunzl teacher portal.

Curious what else is in the Saving vs. Investing unit? Book a demo to see it in the Rapunzl teacher portal.