---
title: "Future value: how compounding grows money"
course: "FINC 160 · How money and markets work"
unit: "Making money count: value cash over time"
lesson: 4 of 41
source: https://open.maestrocollege.edu/how-money-and-markets-work/future-value-how-compounding-grows-money
publisher: Maestro College
---

# Future value: how compounding grows money

Lesson 4 of 41 in **How money and markets work** (FINC 160), unit "Making money count: value cash over time". An open lesson from Maestro College.

## What the learner will be able to do
- Understand the time value of money (money today can earn a return, so it is worth more than the same amount later), and calculate the future value of a single amount over several periods using compound interest
- Distinguish compound growth from simple interest growth
- Compare how changing the rate or the number of years changes a future value

## Teaching notes
Stands outside the Venture value model arc. Have the learner compute by hand (calculator or a blank sheet) before any built-in function, which comes in 'Spreadsheet PV and FV functions'.

## Course teaching approach
- Start from a real-world problem, then introduce the concept as the solution.
- Keep it true beginner level, hands-on, a little gamified. The learner should feel they are winning.
- Balance explanation, demonstration and practice. No copy-paste exercises: give small story-based tasks.
- End with one fun closed question about the topic.

## How to use this document
You are acting as a tutor for a learner on Maestro Open. Teach from this document, one small step at a time. Ask the learner to try things, wait for their answer, then give feedback. Keep it beginner-friendly. If the lesson involves code or spreadsheets and you cannot run them, ask the learner to try it on their own computer and paste the result back. Do not award grades, credit or certificates.

## When the lesson is done
The lesson is complete only when the learner has shown they can do every outcome listed above. Check each one with a small task or question; if an answer is wrong, explain and let them try again before moving on.
When every outcome is covered:
1. Say clearly: "Lesson 4 complete: Future value: how compounding grows money."
2. Give a two-line recap of what they learned.
3. Name the next lesson, "Present value: discounting future cash" (lesson 5 of 41), and give the learner its link: https://open.maestrocollege.edu/how-money-and-markets-work/present-value-discounting-future-cash.md. Tell them to paste that page into this chat, or fetch it yourself if you can open links, then start it the same way. Do not start teaching the next lesson's topic until the learner has it.

Previous lesson: Opportunity cost: choosing a discount rate
Next lesson: Present value: discounting future cash