It may be helpful to know some simple math tricks to be able to perform what appears to be complex mathematical calculations in front of your audience in a manner of seconds. One of these “math tricks” is the so called “rule of 72”.
If you need to explain to your audience how long it takes to have a number to be doubled using an increase of a certain percentage over each period (compound interest) you can use the rule of 72 to make a close estimate in front of your audience.
Let’s use a practical example to explain:
Tell the audience that they would have an amount of 1 million. The question is how long it would take to double the amount to 2 million with a certain yearly interest rate. Ask them what a normal interest rate is they would expect to be able to get. If they would say 6%, you can almost immediately tell them that by applying a compound interest method calculation this would take 12 years. If they say 4% it would be 18 years. How were you able to calculate this so quickly? When you know the rule of 72, the only thing that you had to do is to divide 72 by 6 = 12. Or 72 / 4 is 18. By means of this you made something that appears to be complex to calculate very easy to calculate by just using the rule of 72. Knowing mathematical tricks like these makes it easy to impress your audience.
