Mental Math

You need to know how to work with exponentials.

1^(a*b) = 1^a^b


1.04^54 = (1.04^9)^6 = ~1.4^6 = (~1.4^2)^3 = ~2^3 = 8

But… why do you ask? Howcome this is necessary in a case interview?

Hi Cheryl,

Literally a waste of time to figure this out! This will not be in a case and this is definitely not what's expected in mental math! (Checkout the Preploung mental math exercises for a better idea…though even some of their advanced/hard ones are still too much!)

Such specific questions are actually easier than they look - another method to solve this would be using the 72-rule

72 divided by % growth rate give you the time to double in years

Here, you are working with 1.04 which is nothing but 1 + 4%. So the question can be assumed as a 4% growth rate fund for 54 years

72 divided by 4% = 18 years

so in 54 years the money will double 3 times

After 18 years 1 will become 2 growing at 4%

After 36 years it will become 4

After 54 years it will become 8