The Growth That Starts Growing
€100 grows 10% a round: round 1 reaches €110, and round 2 adds €11 — not €10. Where did the extra euro come from?
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In the year workbook
My Money YearThis lesson has a companion in the printable year workbook: pupil pp. 107–108, teacher companion p. 88.
Learning objectives
- Calculate the balance after round 1 (€110) and round 2 (€121)
- Explain why round 2 growth is €11 rather than €10
- Compare it with a fixed €10-per-round model and find the €1 difference
Vocabulary
- Compound
- When your growth also starts to earn growth over time.
- Growth
- Getting bigger over time; money growth is never guaranteed.
- Return
- The money an investment gains or loses over time.
- Risk
- The chance that something might go wrong or lose value.
- Illustration
- A pretend example that shows an idea, not a real promise.
Materials
Minute-by-minute flow
6′
Hook
Teacher does
Read the story: a fictional model starts at €100 and adds 10% at the end of each of two rounds, each round on the latest balance, with no fees or deposits. Ask what is known and what to find out.
Students do
Say the start is €100 and each round adds 10%.
12′
Model
Teacher does
Think aloud through task 1: calculate round 1 (€100 + €10 = €110) and round 2 (€110 + €11 = €121).
Students do
Work out €110 then €121 using strips or a calculator.
25′
Practise
Teacher does
Set tasks 2 and 3: why is round 2 growth €11 not €10, and how does a fixed €10-per-round model compare?
Students do
Explain the 10% is taken on €110, and find the fixed model ends at €120 — €1 lower.
10′
Discuss
Teacher does
Surface the misconception: growth on growth can also amplify losses — do not describe it as a guaranteed way to get rich.
Students do
Try −10% then +10%: €100 → €90 → €99.
7′
Exit
Teacher does
Pose the reflection: would a real investment always follow this smooth line?
Students do
Answer no — returns vary and losses or fees may occur; it is only an illustration.
Check for understanding
Can the learner reach €121, explain why round 2 adds €11, and say the €1 gap over a fixed-€10 model comes from growth on growth?
Exit ticket
Finish: after two 10% rounds €100 becomes €__ — €1 more than adding a fixed €10 because…
Support
Provide the €110 first-round balance and use ten-percent strips.
Stretch
Model −10% then +10%: €100 → €90 → €99.
Home connection
With a grown-up, use the Little Finance Heroes compound tool to check that €100 grows to €121 over two 10% rounds.