The Rule of 72 Proverbs
|When dealing with low rates of return, the Rule of 72 is fairly accurate. This chart compares the numbers given by the rule of 72 and the actual number of years it takes an investment to double.
Have a student multiply each 6 yr increment
|Rate of Return
||Rule of 72
||Actual # of Years
||Difference (#) of Years
Darren, 16 years old, begins his school day as often as he can with his favorite drink - triple mocha espresso, extra foam, extra hot. Not a big deal from Darren's perspective, but a VERY BIG DEAL from a financial perspective.
Here’s the real jolt.
Let's say he buys a cup of coffee before going to work each morning for a year (50 weeks x 5 days = 250 days). After each preference is added in, and a tip, let’s say it costs $4.
Now if he saved that money instead, by the end of the first year he would be $1,000 richer. And if he invested that $1,000 each year at 9% until he was 61, he’d be $574,186.02 richer.
Otherwise, he's investing in a one half million dollar mocha!
Perhaps Darren should consider saving his money instead - and make his own coffee.
If he did, when Darren is 61 years old, he'll probably be a little less jittery on two counts!
Bottom Line: Wise parents use everyday spending examples to teach their children the power of choice and the wisdom of investing early and often.
Take a look at the Rule of 72 website to calculate any % of interest.
Go to this link for more money advise.
For example, the rule of 72 states that $1 invested at 10% would take 7.2 years ((72/10) = 7.2) to turn into $2. In reality, a 10% investment will take 7.3 years to double (1.10^7.3 = 2).
|Age: + 6 Yrs
||Increase @ 12%
|Pretend your parents started a fund for you at Age 8
OBJECTIVES: Students will be able to:
1. Identify the simple man
2. Explain the difference between the Wisdom and Knowledge
3. describe the
4. chart on a map the
5. define the terms
6. Explain the significance of
Knowledge: Recall of data.
Comprehension: Understand the meaning, translation, interpolation,
and interpretation of instructions and problems. State a problem in one's own
Use a concept in a new situation or unprompted use of an abstraction.
Applies what was learned in the classroom into novel situations in the
Separates material or concepts into component parts so that its
organizational structure may be understood. Distinguishes between facts and
Builds a structure or pattern from diverse elements. Put parts
together to form a whole, with emphasis on creating a new meaning or
Make judgments about the value of ideas or materials.
Apply : Executing,
Evaluate : checking,