See how compound interest builds over time: test your skills
Your returns start earning their own returns — and that changes everything. Answer each question to see the explanation; your score appears at the end.
This test checks that you can
- Explain how growth compounds
- Estimate doubling time with the rule of 72
- See why the same maths works against debt
- Practice
1. What makes compounding powerful?
- Practice
2. Roughly how long to double at 9% (rule of 72)?
- Practice
3. What resets compounding?
- Key idea
4. Which statement best explains "Time is the multiplier"?
- Key idea
5. Which statement best explains "Compounding works both ways"?
- Key idea
6. Which statement best explains "Withdrawals reset the clock"?
- Action plan
7. In the action plan, which step comes first?
- Mistake to avoid
8. Which of these is a mistake this lesson warns against?
- Mistake to avoid
9. Which of these is a mistake this lesson warns against?
$1,000 grows 10% a year for 2 years with compounding. What is it worth?
Show the answer
$1,210
Year 1: $1,100. Year 2: $1,100 × 1.10 = $1,210 ($10 more than simple interest).
Divide 72 by your highest card APR. That is roughly how fast that balance doubles if left alone.
More tests in this bootcamp
- See how compound interest builds over time
- Understand index funds, diversification and fees
- What is an ETF? Understand the basket behind a share
- Compare ETFs and mutual funds without the jargon
- Understand the S&P 500 and what it leaves out
- Explore total market funds and check the overlap
- Understand international diversification and currency risk
- Look beyond the story of a sector or thematic fund
- Understand a three-fund portfolio and rebalancing
- Learn dollar-cost averaging: a schedule instead of market timing
- Final exam: Funds and portfolios