Case study - Tips for calculating with an annual growth rate

Anonymous A asked on Oct 19, 2017 - 1 answer

Hi,

If I am asked in a case interview to calculate a number of x in a market, after 3 years for example, with there is an annual growth of 5% for example, how can I do to avoid tricky calculations with 1,05^3 ?

Thanks !

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Anonymous B replied on Oct 19, 2017

I would answer it like this:

3 * 5% = 15% + a margin for compounding of approx. 1% so the number will grow by 16%.