6 Awesome Math Tricks That Will Make Your Life So Much Easier (Very useful for investors)

Business Insider ^ | 12/06/2011 | Eric Platt

[SeekAndFind]

You're on the trading floor, trying to price out if a 15-year bond issued by General Electric will generate the returns needed to placate your investors.

Bad news, your calculator is dead and the trader from Cantor Fitzgerald is readying to signal his buy. What to do?

Well, if all you need to do is double the investment in five-years, you're in luck.

That's probably not the case, and GE probably isn't issuing 15-year debt. But we compiled a list of six math tricks that might just come in handy.

If you have a math trick you'd like us to add, leave it in the comments or tweet it to @EricGPlatt.

1) The Rule of 72

Need an easy way to determine how long it will take to double your returns? Simply divide the number 72 by your projected growth rate.

So, if your returns are increasing by 10% per year, it will take 7.2 years for them to double in size.

2) The Rule of 115

If you're more inclined to triple your returns, because you're not as risk averse (or perhaps your time horizon is just a tad bit farther out), simply take the number 115 and divide it by your growth rate. This will give you the amount of time it will take to triple your returns.

So, if your returns are increasing by 10% per year, it will take 11.5 years for them to triple in size.

3) The Rule of 70

The rule of 70 dictates how long it will take for inflation to halve the value of a dollar. Simply divide 70 by your expected rate of inflation.

For example, if you expect 3% inflation, then divide 70 by 3.

[wordsofearnest]

Another rule of thumb: If after 15 minutes in a poker game you don’t know who the sucker is, it’s you.

[petercooper]

bttt

[ProudFossil]

The one I always liked was:
Buy low, sell high.
Simple isn’t it? (Much sarcasm on this)

[spankalib]

LOL!

[killermosquito]

I remember listening to all of those investment counselors tell me that I was losing money due to inflation because my money was safely tucked away in CDs. So I finally gave in and lost a small fortune (at least it was for me).

[loungitude]

.

[Lonesome in Massachussets]

Actually, “Buy low, sell high” is somewhat counter-intuitive. Most people chase highs, buy a stock when it is peaking. Nathanson explicitly originated that advice in his turn of the 20th Century classic, “The Rational Investor”.

[Lonesome in Massachussets]

Another interesting, but less useful trick than the rule of 11. (How offen do you need to multiply by 11 anyway?)

What’s the square root of:

12345678987654321 ?

Hint: It was instantly obvious to me the first time I saw it.

[ProudFossil]

Actually, “Buy low, sell high” is somewhat counter-intuitive. Most people chase highs, buy a stock when it is peaking. Nathanson explicitly originated that advice in his turn of the 20th Century classic, “The Rational Investor”.

I know the actual saying is buy high, sell low but I am an optimist (and generally have been able to avoid Nathanson's advice).

[Lonesome in Massachussets]

How many trailing zeros in 40000005!

40000005! = 40000005 x 40000004 x 40000003 x ... 2 x 1

10! = 3628800, two trailing zeros

16! = 20922789888000, three trailing zeros

Hint: You do not have to multiply to get the answer.

[ProudFossil]

Another interesting, but less useful trick than the rule of 11. (How offen do you need to multiply by 11 anyway?) What’s the square root of: 12345678987654321 ?

Isn't it half of 222,222,222?

[colinhester]

Bflr

[bvw]

Is the “it” that was immediately obvious the same as the “it” you saw? I have to ask because you used 2 “it”s. Me, I would have used

1

letting my fingers linger awhile on the button.

[Lonesome in Massachussets]

Good work. How did you get it? Using electronics takes the fun and challenge out of it. Now tackle my challenge in #11. I composed that myself, but I am sure someone else has thought of it as well.

Hint when you get the answer, you will know that you are correct.

[Lonesome in Massachussets]

It was obvious to me because I am familar with polynomial convolution. Let X = 10, and y = p(x) = a(n) x X^n + a(n-1) x X^(n-1) + ...+ a(0) x X^0.

Then y^2 = convolution( p(x), p(x)). Obvious?

[muir_redwoods]

Remember these three things and you’ll be able to figure dates and days of the week all year

It’s as easy as 1-2-3, and do you like your 9 to 5 job at the 7-11 and can you count by twos?

Start with the last day of February. 2/29 is a Wednesday in 2012.

So is 4/4, 6/6, 8/8/ 10/10 and 12/12. So is 5/9, 9/5 and 7/11, 11/7. Follow through to 2013 and 1/23 is also a Wednesday as was 3/21 in 2012.

The last day of February in 2013 is a Thursday; the day advances by one each year and by two in a leap year.

Most folks can figure a date and day if they know one in the month.

[ziravan]

Bfl

[ProudFossil]

Good work. How did you get it? Using electronics takes the fun and challenge out of it. Now tackle my challenge in #11. I composed that myself, but I am sure someone else has thought of it as well. Hint when you get the answer, you will know that you are correct.

I cheated. I asked my wife. She is the smart one .

[Bigh4u2]

None?