A two-minute test · no calculator
How good is your money intuition?
Eight savings accounts. Guess what each one is worth at the end. Then see the two specific ways your guesses were wrong, and what to do about it.
You'll see a starting amount, an interest rate and a number of years. Type the total you think the account reaches. Don't calculate; the point is to see how your gut does. Most people finish in under two minutes.
Nothing you type is stored or sent anywhere. The scoring runs entirely in your browser.
Account 1 of 8
Deposited today
Interest, compounded yearly
Left untouched for
What is the account worth at the end?
Round numbers are fine. Press Enter to move on.
Your results
Your guesses, on average
of the true valueStudy participants
58%geometric mean across 3,213 estimates in Study 1 of the paperBias one · well known
You underrated time.
This is exponential growth bias, and almost everyone has it. Interest earns interest, so the curve bends upward, but the mind draws a straight line. Fifty years of research shows the same thing: people picture compound growth as if it were simple interest. It matters because people who show more of this bias save less for retirement and carry more debt. Financial education helps, a bit.
Bias two · new
You also underrated the deposit.
Your scaling
1.00 means you scaled the deposit correctlyStudy average
0.92Posner & Gladstone, 793 participants, 5,763 estimatesBars: the 261 participants in Study 1 who estimated this same pair of accounts ($7,000 and $56,000 at 8% for 14 years). Median 0.98; four in ten scaled the deposit too little, one in ten too much.
This second error is one my co-author Nate Posner and I identified. Call it principal linearity neglect. Doubling the deposit doubles the final value, exactly, every time. There is nothing exponential about it. Yet when we asked 793 people to estimate accounts that differed only in the starting amount, their answers grew about 8% too slowly. The likely cause is how the brain represents quantity: large numbers feel closer together than they are. Unlike the time bias, this one does not shrink with financial literacy or maths ability. It shrinks a little when people slow down.
What to do with this
Two rules your gut will keep getting wrong.
Time is the lever you underrate most. At 7% a year, the last ten years of a forty-year account earn more than the first thirty put together. Starting now, with less, beats starting later with more far more often than intuition suggests.
Bigger contributions count in full. A deposit 20% larger ends 20% larger, no matter how long it runs. Your gut will discount the extra money. Don't let it: when you weigh up whether to save a bit more, the extra is worth exactly what it says.
And a third, which is really the point of the test: don't trust the estimate. For any decision that matters, use a calculator. Your intuition is compressed in two directions at once, and knowing that is most of the fix.
Based on Posner, N., & Gladstone, J. J. Beyond exponential growth bias: Principal linearity neglect in savings judgments. Journal of Consumer Psychology, in press. Exponential growth bias: Wagenaar & Sagaria (1975); Stango & Zinman (2009). Nothing you enter leaves your browser.