Every concept, endless questions
Each concept is a small financial model. Read how it works, then draw a real interview question from it: forwards, backwards or what-if, with fresh numbers and a worked solution every time.
Forward runs a concept the usual way. Inverse runs it backwards, which is what separates understanding from memorizing.
Mental Math
2 conceptsFast percentages and fractions
On a trading floor, percentages are done in your head and fast, and the trick is never to compute what you can recognize. 12.5% is an eighth; 17.5% is 10 plus 5 plus 2.5; a 25% rise needs a 20% fall to undo, because the fall is measured from a bigger number. Basis points are just hundredths of a percent. Knowing a handful of fractions cold — sevenths, ninths, elevenths, sixteenths — turns most of these into recall rather than arithmetic, and leaves your attention for the actual question.
Rule of 72 and quick compounding
Compounding is hard to do in your head and easy to count in doublings. Money growing at r percent a year doubles in about 72 ÷ r years, because ln 2 is 0.693 and ln(1 + r) is a little under r — 72 rounds the gap and has lots of divisors. Once you think in doublings, "8% for 27 years" becomes "three doublings, so eight times". The rule is best around 8%; it runs slightly long for low rates and slightly short for high ones, which is worth knowing before you quote it to a client.