Situation: Jack is 4 years old, and Jill is 7 years old. Let's now do some mathematical reasoning on this.

1. When Jack is 8 years old, how old will Jill be? (Answer = 10)
2. In 10 years time, how much older will Jill be than Jack? (Answer = 3 years)
3. How long ago was Jill twice the age of Jack? (Answer = 1 year)

Introduce your child to the first rule of investing - avoid losing money since you'll have to work twice as hard to end up back where you started again! You can demonstrate this point by asking your child to calculate a few simple percentages.

1. If you invest £1,000 which loses 50%, what do you have? (Answer = £500)
2. Then if you invest £500, which gains by 50%, what do you have? (Answer = £750)
3. If you lose 50% of an investment, what percentage do you need to then gain by to end up where you started? (Answer = 100%)

Ask your child to start with the number 2 and keep doubling it. After just 9 doublings it will exceed 1,000! Explain how something small grows increasingly quickly (exponentially) when increasing by any percentage year on year.

1) If you double 2 you get 4. How many more doublings would you need to get to a number bigger than 1,000?

2) Can you draw a line with your finger which shows what "exponential growth" looks like?

3) If you put £2 in the bank knowing it will double every year - how rich will you be in 10 years time?