In one part of the interview, this is a solution:
The interviewee should be able to estimate the fact that $100*(1 + 20%)^5 is something like $250 off the cuff. Without compounding, it’s obviously $200 exactly, so the answer “something a bit more than $200” is good. Many people answer $200 exactly and, when prompted “is it more or less than $200” choose “less”, which is clearly madness.
1) How should I be able to estimate that this is 250$?
2) If I estimate in that the worth in 5 years will be 100$ + 5*20%(100$), how should I know if it the number should be higher or lower than 200$?
3) In this case, would you do the whole math or simplify it?