A classroom-ready 55 minutes lesson plan with starter, main, plenary, differentiation, SEND adaptations, EAL support and assessment criteria. Free to use, no login.
Key Stage
KS3
Year group
Year 9
Age range
13–14
Duration
55 minutes
Subject
Maths / PSHE / Citizenship
Cost
Free
Learning aim
Pupils can calculate compound interest using the formula A = P(1 + r/100)^n and explain why starting to save early matters more than the interest rate.
CURRICULUM National Curriculum links
Maths KS3: "solve problems involving percentage change, including: percentage increase, decrease and original value problems and simple interest in financial mathematics"
Maths KS3: use exponential equations to solve compound interest problems
PSHE Association KS3 L25: about different ways to save money
Citizenship KS3: managing personal finances
RESOURCES What you'll need
Compound interest worksheet (with formula)
Two saver scenarios printed: "Sarah saves at 18" vs "Tom saves at 30"
Graph paper (1 sheet per pupil)
Calculators (mandatory)
LESSON Lesson structure (55 minutes)
Opening HOOK
Pose this classic: "Would you rather have £1 a day for 30 days, OR 1p doubled every day for 30 days?" Take votes. Most pick £1/day = £30 total. Reveal: doubling 1p for 30 days = £5,368,709.12 (over five million pounds). That's what compounding does. Compound interest works the same way — just slower.
Direct teach TEACH
Define and contrast: Simple interest = interest only on the original deposit; Compound interest = interest on the original PLUS interest already earned. Show the formula: A = P × (1 + r/100)n, where A = final amount, P = principal (starting amount), r = rate (%), n = number of years. Worked example on the board: £100 at 5% for 10 years = £100 × 1.0510 = £162.89. Same money at simple interest = £150. Difference: £12.89 — and it grows each year.
Pupils apply GUIDED
Pupils calculate compound interest for £1,000 at 5% over 5, 10, 20, and 30 years using their calculators. Record on the worksheet. Then plot the results on graph paper: years on x-axis, amount on y-axis. They'll see the curve — slow at first, then accelerating. Discuss: when does the growth really take off? (Years 20+.)
Stretch / depth CHALLENGE
The most important real-world scenario: "Sarah starts saving £100/month at age 18 and STOPS at age 28 (10 years of saving, then nothing more). Tom starts saving £100/month at age 30 and saves until 65 (35 years of saving). Both earn 7% average return per year. Who has more at age 65?" Pupils calculate. Reveal: Sarah's earlier 10 years of saving (£12,000 in total) BEATS Tom's 35 years (£42,000 in total). Sarah ≈ £200,000 at 65, Tom ≈ £170,000. Build the insight: starting early matters more than saving longer.
Close PLENARY
Each pupil uses the formula to write a prediction: "If I started saving £20/month at age 18 at 5% interest, by age 60 I would have approximately ___." Share three answers. Final reflection: "Why don't more people start saving at 18?"
DIFFERENTIATION Adapting for all learners
Support (working below ARE)
Use round numbers (£100 starting at 10% for 5 years) and a calculator throughout. Provide a worked example to copy. Focus on understanding the curve shape rather than calculation precision.
Stretch (working above ARE)
Pupils derive the formula themselves from first principles. Calculate a 50-year compound. Then: "What happens if the interest rate is 0%? Negative?" Discuss real-world cases (savings accounts paying below inflation = real loss).
SEND SEND adaptations
For pupils with dyscalculia: pre-fill the table with the calculator results, pupils identify the pattern visually. For pupils with autism: provide the formula as a step-by-step "recipe" — fill in each variable in order. For visually impaired pupils: use audio-described graph examples.
EAL EAL support
Vocabulary: "interest", "compound", "principal", "rate", "annual", "deposit", "exponential". Sentence frame: "After ___ years, my £___ at ___% interest becomes £___."
ASSESSMENT Assessment criteria
Pupils can: (1) calculate compound interest on £100 at 5% for 10 years using the formula; (2) explain in their own words why compound interest grows faster than simple interest; (3) identify why starting to save early matters more than the interest rate; (4) plot a compound-interest curve.
HOME Homework
Pick a real saving goal in pounds (e.g. £1,000 by age 25). If you started saving £30/month from age 15 at 5% interest, would you reach it by age 25? When would you reach it? Show your working.
SAFEGUARDING Classroom safeguarding
Note for teachers: Use fictional savers (Sarah, Tom) throughout. Do not ask pupils about their family's savings or whether they themselves have a savings account. Be aware some pupils may have no savings — frame the lesson as "what compound interest can do when you have money to save".