Hi there,

I can definitively say you will not be required to do this.

By the way, your formula is already wrong. 125% does not translate into 1.25. 

25% translates into 1.25

If I were to eyeball this, I would say it doubles every year and then some.

So, I'll double 5, 5 times, to get 160. Then, I'd double it one more time to account for the .25, getting 320

Hi there!

I'd challenge you whether that's actually needed in the interview. 

Interviewers test your skills, not your knowledge, nor your mathematical prowess. 

Basically, they want you to be decent with number, not a genius (otherwise they would be hiring math Phds). 

Best,
Cristian

I think Ian and Francesco presented some good approaches here.

In general, with questions like this, the keys are going to be:

• Rounding and simplifying 
• Breaking the calculation up into easier parts

But I don't think you'll be required to do a calculation like this with some compounding on the fly. Maybe as part of the quantitative portion, where you can write it out and take a moment to calculate it.

Hello!

Precisely for the high amount of questions (1) asked by my coachees and students and (2) present in this Q&A, I created the “Economic and Financial concepts for MBB interviews”, recently published in PrepLounge’s shop (https://www.preplounge.com/en/shop/prep-guide/economic_and_financial_concepts_for_mbb_interviews).

After +5 years of candidate coaching and university teaching, and after having seen hundreds of cases, I realized that the economic-related knowledge needed to master case interviews is not much, and not complex. However, you need to know where to focus! Hence, I created the guide that I wish I could have had, summarizing the most important economic and financial concepts needed to solve consulting cases, combining key concepts theorical reviews and a hands-on methodology with examples and ad-hoc practice cases.

It focuses on 4 core topics, divided in chapters (each of them ranked in scale of importance, to help you maximize your time in short preparations):

·        Economic concepts: Profitability equation, Break even, Valuation methods (economic, market and asset), Payback period, NPV and IRR, + 3 practice cases to put it all together in a practical way.

·        Financial concepts: Balance sheet, Income statement/P&L and Performance ratios (based on sales and based on investment), +1 practice case

·        Market structure & pricing: Market types, Perfect competition markets (demand and supply), Willingness to pay, Pricing approaches, Market segmentation and Price elasticity of demand, +1 practice case

·        Marketing and Customer Acquisition: Sales funnel, Key marketing metrics (CAC and CLV) and Churn, +1 practice case

Feel free to PM me for disccount codes for the guide, and I hope it helps you rock your interviews!