Quick Math for Finance Interviews: Mental Calculation Shortcuts and Estimation Techniques

You're in a superday. The interviewer asks: "A company has $500 million in revenue growing at 8% annually. What's revenue in year five?"

No calculator. No Excel. No time to work through long multiplication.

Mental math ability signals competence in finance. It shows you're comfortable with numbers—that you can think quantitatively in real time. Interviewers don't expect perfection, but they do expect confidence and reasonable accuracy.

Here are the shortcuts that make quick calculations manageable.

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The Core Principle: Estimation Over Precision

Why Approximation Wins

In interviews, close is good enough. The interviewer asking "What's 23 times 47?" doesn't care whether you say 1,081 or 1,100. They care whether you can get in the ballpark quickly.

Finance work requires constant estimation:

• "Is this multiple reasonable?"
• "What's a rough sense of the returns?"
• "Does this number pass the smell test?"

Precision comes from Excel. Estimation comes from mental math. Interviews test the latter.

The 80/20 Rule

Most interview math falls into predictable patterns:

• Percentage calculations
• Compound growth
• Basic multiplication/division
• Unit conversions (millions to billions)
• Quick ratios and multiples

Master these, and you'll handle 80% of what you'll face.

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Percentage Shortcuts

The Building Block Method

Every percentage can be built from simple components:

10% of anything: Move the decimal one place left

• 10% of $500M = $50M
• 10% of 847 = 84.7

5% of anything: Half of 10%

• 5% of $500M = $25M

1% of anything: Move the decimal two places left

• 1% of $500M = $5M

Combine to get any percentage:

• 15% = 10% + 5%
• 23% = 20% + 3% = (2 × 10%) + (3 × 1%)
• 7.5% = 5% + 2.5% = 5% + half of 5%

Example: What's 23% of $400M?

• 20% of $400M = $80M
• 3% of $400M = $12M
• 23% = $80M + $12M = $92M

Quick Percentage Conversions

Memorize these equivalents:

Fraction	Percentage	Decimal
1/2	50%	0.5
1/3	33.3%	0.333
1/4	25%	0.25
1/5	20%	0.2
1/6	16.7%	0.167
1/8	12.5%	0.125
1/10	10%	0.1

Example: What's 33% of $600M? Think: 33% ≈ 1/3, so $600M ÷ 3 = $200M

Percentage Changes

To find percentage change: (New - Old) / Old × 100

Shortcut: Frame as "what fraction is the change of the original?"

Example: Revenue grew from $80M to $100M. What's the growth rate?

• Change = $20M
• Original = $80M
• $20M / $80M = 1/4 = 25%

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Compound Growth: The Rule of 72

The Basic Rule

To find how long it takes to double at a given growth rate: 72 ÷ growth rate = years to double

Examples:

• 8% growth → 72/8 = 9 years to double
• 12% growth → 72/12 = 6 years to double
• 6% growth → 72/6 = 12 years to double

Working Backwards

To find what growth rate doubles in X years: 72 ÷ years = required growth rate

Example: "What growth rate doubles revenue in 5 years?" 72/5 ≈ 14-15%

Approximating Future Values

For small growth rates over short periods: Use simple multiplication: Value × (1 + rate × years)

Example: $100M growing at 5% for 3 years Approximate: $100M × (1 + 0.05 × 3) = $100M × 1.15 = $115M Actual: $115.76M (close enough)

For larger growth or longer periods: Think in doubling periods.

Example: $100M growing at 10% for 7 years

• 72/10 ≈ 7 years to double
• So ~$200M after 7 years

The 10% Shortcut

10% annual growth compounds nicely:

Years	Multiplier	Quick Math
1	1.10	+10%
2	1.21	+21%
3	1.33	+33%
5	1.61	+61%
7	1.95	~2×
10	2.59	~2.6×

Memorize these. They come up constantly.

Example: $500M at 10% growth for 5 years $500M × 1.6 = $800M (actual: $805M)

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Multiplication Shortcuts

Breaking Numbers Apart

Split numbers into manageable pieces:

Example: 23 × 47

• 23 × 47 = 23 × (50 - 3)
• 23 × 50 = 1,150
• 23 × 3 = 69
• 1,150 - 69 = 1,081

Round and Adjust

Round to easy numbers, then correct:

Example: 19 × 24

• 20 × 24 = 480
• Subtract 24 (for the 1 you rounded up)
• 480 - 24 = 456

Use Anchors

Anchor calculations to round numbers:

Example: 48 × 52

• Notice: (50-2) × (50+2) = 50² - 2² = 2,500 - 4 = 2,496
• Or: 48 × 50 + 48 × 2 = 2,400 + 96 = 2,496

For Large Numbers (Millions/Billions)

Think in units and add zeros at the end:

Example: $340M × 7

• 34 × 7 = 238
• Add back the magnitude: $2,380M or $2.38B

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Division Shortcuts

Factor the Divisor

Break divisors into smaller factors:

Example: 480 ÷ 12

• 12 = 4 × 3
• 480 ÷ 4 = 120
• 120 ÷ 3 = 40

Use Compatible Numbers

Round to numbers that divide evenly:

Example: 847 ÷ 9

• 847 ≈ 810 (divisible by 9)
• 810 ÷ 9 = 90
• Adjust up slightly: ~94 (actual: 94.1)

Convert to Fractions

Use fraction equivalents:

Example: $150M ÷ 6

• Think: 150/6 = 25
• Answer: $25M

Dividing by 7, 8, 9

These are harder. Use benchmarks:

1/7 ≈ 14% 1/8 = 12.5% 1/9 ≈ 11%

Example: $560M ÷ 7

• Think: 56/7 = 8
• Answer: $80M

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Valuation Quick Math

EV/EBITDA Calculations

Given EBITDA and multiple, find EV: EV = EBITDA × Multiple

Example: EBITDA of $75M at 10x $75M × 10 = $750M EV

Given EV and EBITDA, find multiple: Multiple = EV ÷ EBITDA

Example: $600M EV, $50M EBITDA $600M ÷ $50M = 12x

P/E Quick Math

Given earnings and P/E, find equity value: Equity Value = Earnings × P/E

Example: $120M earnings at 15x $120M × 15 = $1,800M = $1.8B

Implied Growth Rates

Quick test: Does the multiple make sense for the growth?

Rule of thumb: P/E roughly equals growth rate for "fairly valued" growth companies (PEG ratio of 1).

A company trading at 25x P/E should be growing around 25% to justify the multiple.

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IRR and Returns Quick Math

The Rule of 72 for IRR

If you know the multiple and holding period:

2× in 5 years: 72/5 ≈ 15% IRR 3× in 5 years: About 25% IRR (think: more than double) 2× in 3 years: 72/3 = 24% IRR

Common Multiple/IRR Combinations

Memorize these (5-year hold):

MOIC	IRR
1.5×	~8%
2.0×	~15%
2.5×	~20%
3.0×	~25%

Quick MOIC from Growth

If a company's equity value grows at rate R for N years: MOIC ≈ (1 + R)^N

Example: 20% growth for 5 years MOIC ≈ 1.2^5 ≈ 2.5×

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Interest and Debt Math

Annual Interest Calculation

Interest = Principal × Rate

Example: $400M debt at 8% Interest = $400M × 0.08 = $32M annually

Debt Paydown Over Time

Example: $500M debt, $50M annual paydown Years to pay off = $500M ÷ $50M = 10 years

Coverage Ratios

Interest Coverage = EBITDA ÷ Interest

Example: $100M EBITDA, $25M interest Coverage = 4.0×

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Working Capital and Cash Flow

Working Capital as % of Revenue

If NWC is 10% of revenue:

Example: $300M revenue, 10% NWC NWC = $30M

Cash Flow from EBITDA

Example: $80M EBITDA, 20% capex, 25% tax rate, minimal WC change

Quick FCF:

• Start: $80M EBITDA
• Less capex (~$16M): $64M
• Less cash taxes (~$16M on EBIT): ~$48M

Conversion Ratios

FCF conversion = FCF ÷ EBITDA

High conversion (>80%): Capital-light business Low conversion (<50%): Capital-intensive business

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Unit Conversions

Millions to Billions

Move decimal three places left:

• $4,500M = $4.5B
• $850M = $0.85B

Billions to Millions

Move decimal three places right:

• $2.3B = $2,300M
• $0.75B = $750M

Per Share Math

Market Cap = Share Price × Shares Outstanding

Example: $45 share price, 200M shares Market cap = $45 × 200M = $9,000M = $9B

Earnings Per Share = Net Income ÷ Shares

Example: $600M net income, 150M shares EPS = $600M ÷ 150M = $4.00

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Interview Practice Problems

Problem Set 1: Percentages

1. What's 17% of $800M?
2. Revenue grew from $200M to $250M. Growth rate?
3. What's 8% of $1.3B?

Answers:

1. 10% = $80M, 7% = $56M, Total = $136M
2. $50M/$200M = 25%
3. 8% of $1.3B = 8% × $1,300M = $104M

Problem Set 2: Growth

1. $100M growing at 15% for 5 years?
2. How long to double at 6%?
3. What growth rate triples money in 10 years?

Answers:

1. 15% for 5 years ≈ 2× (Rule of 72: 72/15 ≈ 5), so ~$200M (actual: $201M)
2. 72/6 = 12 years
3. Need to triple = 1.5 × double. Double in ~7 years at 10%, so ~11-12% growth

Problem Set 3: Valuation

1. $60M EBITDA at 9× multiple. What's EV?
2. $720M EV, $80M EBITDA. What's the multiple?
3. $50 stock, 16× P/E. What's EPS?

Answers:

1. $60M × 9 = $540M EV
2. $720M ÷ $80M = 9×
3. $50 ÷ 16 = $3.125 EPS

Problem Set 4: Returns

1. 2.5× return in 4 years. Approximate IRR?
2. $200M entry, $500M exit after 5 years. MOIC and IRR?
3. 18% IRR for 6 years. Approximate MOIC?

Answers:

1. 2× in 4 years ≈ 18% (72/4), 2.5× is higher, so ~22-25% IRR
2. MOIC = 2.5×, IRR ≈ 20%
3. 18% ≈ double in 4 years, 6 years ≈ 1.5 doublings, so ~2.7×

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Building Your Mental Math Muscle

Daily Practice Routine

5 minutes daily:

• Generate random calculations throughout the day
• Estimate restaurant bills, tips, discounts
• Calculate percentages of things you see

Pre-Interview Practice

Two weeks before interviews:

• Do 20 quick calculations daily
• Practice with a timer
• Build speed before accuracy (accuracy follows)

During Interviews

If you get stuck:

1. Round aggressively
2. Talk through your approach
3. Give a range ("somewhere between 150 and 180")
4. Check if it's reasonable

What interviewers want to see:

• Comfort with numbers
• Logical approach
• Reasonable estimation
• Confidence

They don't expect calculator precision. They expect quantitative competence.

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Key Takeaways

Mental math in finance interviews tests your comfort with numbers, not your ability to be a human calculator.

Master the fundamentals:

• Percentages through the building block method
• Compound growth through the Rule of 72
• Multiplication and division through factoring and rounding

For valuation math:

• Memorize common MOIC/IRR relationships
• Know EV/EBITDA and P/E calculations cold
• Practice quick interest and debt paydown math

The meta-skill:

• Estimation beats precision
• Talk through your logic
• Round aggressively to manageable numbers
• Give ranges when appropriate

With practice, quick math becomes automatic. That confidence shows in interviews—and it makes you more effective in the actual work.

The interviewer doesn't care if your answer is 847 or 850. They care that you can think quantitatively in real time.

Practice until you can.