Brainteaser: Doubling Pennies or $1 Million?

Here’s a fun question to pose to your family. Would you rather: 

A) Start with a penny and have your money double in value everyday for 30 days, or 

B) Just receive $1 million now?

 Scroll down for the answer

Answer

If you do the math, the answer that maximizes your money is actually A) start with the penny! At the end of the 30 days, you would have $5.3 million dollars. If you don’t believe it, see the table below for a day by day breakdown! - This increase in value is because of the power of compounding interest. 

To quote Albert Einstein,

“Those who understand [interest], earn it; Those who don’t, pay it.”

To teach kids about the power of compounding interest, Guardian Savings offers a feature where  parents can reward their kids with an interest rate of their choice. Many parents opt to choose a rate of over 10% so that kids can learn how powerful interest can be first hand. 

Now the challenge with option A is that you have $5.3 million but it’s all in pennies… you’ll face the challenge of having to find a bank that will accept them and get them all there!  Funnily enough, the copper used to make a penny is worth about 1.7 cents so if you sold just the pennies for copper, you’d make $9.1 million!

Table of Earnings: Starting with a Penny and Doubling Daily

Day	Value ($)
1	0.01
2	0.02
3	0.04
4	0.08
5	0.16
6	0.32
7	0.64
8	1.28
9	2.56
10	5.12
11	10.24
12	20.48
13	40.96
14	81.92
15	163.84
16	327.68
17	655.36
18	1,310.72
19	2,621.44
20	5,242.88
21	10,485.76
22	20,971.52
23	41,943.04
24	83,886.08
25	167,772.16
26	335,544.32
27	671,088.64
28	1,342,177.28
29	2,684,354.56
30	5,368,709.12