Hi all,
I've always been strong at math (mental & otherwise), but would love to get better at dealing with % increases YoY.
F.i. a business have generated a 7% YoY growth for 13 years - how much has it grown? It's obviously a lot more than 13*7%, but unsure of how to deal with this effectively
Does anyone have tips on how to deal with this? The above is one example, but trying to get better at % math over periods
You have a cell phone with a calculator in it, and can figure these things out in 2.6 seconds without the risk of making a mistake. Stop wasting your, and everyone else on this websites time.
MBB interviews don't allow calculator that's why
1.07^13
Rule of seventy /seventy two is handy. This combined with the basic understanding that through compounding you should end up higher than with simple interest you get a slightly higher result (moreso over the long run) should help you solve most problems in your head with a little error allowed.
For example 70% / 7 % = 10 years to double. Then you have three years left accruing at 7% which should be slightly higher than 7%*3, so slightly higher than 21%. Call it 22% since it's only three year's compounding. Then you get 10 years =2x * 3 years= 1.22x = 2.44x.
It's slightly off, but hey we're doing mental math.
This is perfect, thanks a lot. Wasn't aware of the rule of 72.
Thank - helpful. How did you get from 1.22x -> 2.44x?
Surely it's 70/7 = 10 years to double 7%*3 = ~22%
= 222%
How did you go from 222% to 244%?
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