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Snowball Money

A Money Detectives lesson. This page is for grown-ups: preview it before your kid plays, or talk about it after.

With compound interest, your interest earns interest, too. Growth speeds up like a rolling snowball.

For ages 8–10 (grades 3–5) · about 15 minutes · read-aloud on every screen

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What your kid learns

  • Simple interest

    Simple interest adds the same amount each year. Pretend: $100 at 10¢ for each $1 earns $10 every year.

  • Interest on interest

    Compound interest gets added to your money. So next year’s interest is figured on a bigger amount. Your interest earns interest!

  • Slow, then fast

    It starts small. Then it grows faster and faster, like a snowball rolling downhill. The big clue: leave the interest in.

The story: The Case of the Two Snowballs

In a park, Leo and Mei each save a pretend $100. Mei leaves the interest in and ends up with more.

  1. Helper: A race, detectives! Leo and Mei each save a pretend $100.
  2. Helper: Pretend rate: 10¢ for each $1 a year. That’s much higher than most banks pay, picked for easy math.
  3. Leo: I take my $10 of interest out each year.
  4. Mei: I leave mine in. It rolls into my savings.
  5. Mei: So next year, my interest is figured on more money!
  6. Helper: After 10 years, Leo has $200 in all. Mei has about $259!
  7. Leo: Wow. Leaving it in made Mei’s snowball grow!
  8. Helper: Case closed! Leave it in and let it roll.

The game: Two Snowballs

Watch Mei’s pretend $100 grow at 10¢ for each $1 a year. That’s much higher than most banks pay, picked for easy math.

Games use pretend money and work with taps or a keyboard. Nothing is timed.

New words

compound interest
interest that earns interest, too
simple interest
the same interest amount every year
principal
the money you started with

Questions at the end

  • What makes compound interest different?
  • Two kids save the same pretend money. Who ends with more?
  • Why does leaving interest in matter?

Remember this

Leave it in and let it roll.

Talk about it

Look at the growth chart together and ask: why does the line bend up?

Try it at home: Color a snowball chart

  1. Draw 5 snowballs, each a little bigger than the last.
  2. Label them year 1 to year 5.
  3. Color them in. Notice how the growth speeds up!

Color in a paper snowball chart.

School standards

  • National Standards for Personal Financial Education: Saving
  • National Standards for Personal Financial Education: Investing
  • Common Core Math 4.OA.C.5
  • Common Core Math 4.NBT.B.5

Builds on

Leads to

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Lessons teach how money works. They are not financial advice.