How it works
Maya borrowed one hundred pretend coins from Mr. Moss. Each year the barn added one new coin for every ten coins owed.
Unpaid, the pile grows faster every year, because the interest is charged on the interest already owed. After ten years Maya owes 256, more than double.
Paying sooner is cheaper, and paying a little each year slows the snowball until it is gone.
Worked examples
How much interest next year?
- The barn adds 1 coin for every 10 coins owed.
- Maya owes 121 coins.
- 121 holds twelve tens, and 12 × 10 = 120.
- So 12 coins are added.
Pay back after one year
- Maya owes 100, and one year adds 10 coins.
- 100 + 10 = 110
- The extra she pays is 110 − 100 = 10 coins.
Pay back after three years
- After 3 years unpaid, the pile is 133.
- 133 − 100 = 33
- That is 33 coins extra, against only 10 for paying after one year.
Paying 30 a year
- Year 1: she owes 110, pays 30, and 110 − 30 = 80.
- Year 2: 80 holds eight tens, so 80 + 8 = 88, and 88 − 30 = 58.
- Year 3: 58 holds five tens, so 58 + 5 = 63, and 63 − 30 = 33.
- Year 4: 33 holds three tens, so 33 + 3 = 36, and 36 − 30 = 6.
- Year 5: she pays the last 6, and the pile is gone. She paid 30 + 30 + 30 + 30 + 6 = 126 coins in all.
A taste of the worksheets
These are some of the questions on the sets. The printable sheets have more and an answer key.
- True or false? Maya says: paying thirty coins a year makes the pile grow even faster. Is Maya right?
- Stretch: Maya paid 126 coins in all for a loan of 100. That is ___ coins more than she borrowed.
- A loan of one hundred coins stays unpaid. Which wait grows it to one hundred ten? waiting five years to pay / waiting one year to pay / waiting nine years to pay
- True or false? 🪙 Does paying a little each year on a loan work against a borrower?
- Which one does not work against a borrower? 🏁 paying a loan back early / 📈 interest on a loan nobody has paid / 🗓️ a loan nobody touches for years
Words to know
- borrower
- The one who owes the coins.
- lender
- The one who lends the coins, like Mr. Moss.
- interest
- Extra coins added to what is owed.
- snowball
- A pile owed that grows faster each year.
Watch out for
- Interest on interest owed makes the pile grow faster every year.
- Waiting costs more: after one year the extra is 10, after five years it is 60.
- Paying a little each year slows the snowball.
- These loans are made up. Real loans use different numbers, so ask a grown-up how theirs work.
Try it
Maya owes 133 coins. How many coins of interest are added next year?
13 coins. 133 holds thirteen tens.
A hundred coins owed, unpaid for one year, becomes how many?
110 coins. 100 + 10 = 110.
Does paying back after one year or after five years cost less extra?
After one year. One year costs 10 extra. Five years cost 60 extra.
Interest on an unpaid loan: does it work for you or against you?
Against you. The pile owed grows, and it grows faster each year.
For grown-ups
With a grown-up, talk about what it costs to borrow, in a made-up story and in real life. What do they ask before they borrow? Why does the time to pay back matter?
The same snowball can roll for you or against you. Talk about what a grown-up asks before borrowing: what it costs and when it must be paid back. These numbers are made up, and real loans differ, so look at any real loan's terms together.