Counting is the fundamental building block of arithmetic. Using pegs to count and add involves the application of fine motor skills which automatically ensures greater accuracy and stronger reinforcement of quantity. Memory Games such as bringing back the pegs for a particular number strengthen children's memory for numbers which is critical for all mental arithmetic operations. The actions of picking, placing, and removing pegs improve pencil grip and hence writing skills.
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https://www.youtube.com/watch?v=SaaZjijO0kA