This study investigates the impact of the Classroom Store Simulation Challenge on enhancing the mathematical problem-solving skills of Grade 2 learners in the Philippines. A total of 31 heterogeneous learners who scored below mastery level participated in a quantitative research design that utilized pre-and post-test assessments to measure improvements in problem-solving abilities. Statistical analysis, including means and paired t-tests, revealed a significant increase in learners’ performance following the intervention, demonstrating the effectiveness of this innovative approach. While contextualized learning has been widely applied in education, this study advances the field by integrating technology-enhanced simulations, interactive problem-solving, and real-world application. This combination has not been explored in early numeracy education. Unlike traditional contextualized learning strategies that rely on static word problems, the Classroom Store Simulation Challenge immerses learners in experiential, real-world transactions, where they use digital and play money in simulated buying and selling activities. This engaging, hands-on approach bridges conceptual understanding with practical application, fostering more profound learning, enhanced engagement, and improved problem-solving proficiency. The findings highlight the potential of simulation-based, contextualized learning as a scalable, evidence-based strategy for strengthening early mathematics education.