The modern IQ Test, called the Stanford-Binet Test, is a 1916 modification of the 1904 intelligence test invented by Alfred Binet, head of the Sorbonne's psychology laboratory, by Stanford University psychologist Lewis Terman.
Drawing from a concept first suggested by German psychologist, William Stern, Terman developed a new formula for comparing a child's intelligence to that of other children the same age. He did it by diving the test maker's "mental age," as determined by the test, by the test taker's chronological age. Then he multiplied the result by 100 to get a whole number:
(Mental Age / Chronological Age) x 100
Terman called this number the "intelligence quotient," or IQ for short. According to this formula, a 10-year-old child with a mental age of 12 would have an IQ of (12/10) x 100 = 120. Likewise, a ten-year-old child with a mental age of eight would have an IQ of 80, and any child with the same mental and chronological age - indicating normal intelligence - would have an IQ of 100.