Investment Banking interview preparation
Every question below is either traced to a named firm from a public candidate report, or tagged at desk level when we could not trace it. Answers are written the way you would actually say them out loud — answer first, then the mechanism, then the limitation.
100 questions, mapped to the firms that asked them
- Questions
- 100
- Traced to a firm
- 100
- Firms
- 46
- Updated
- September 2026
055If I make 8 times my money in 6 years, what is my IRR?Warburg PincusPrivate Equity · New York · 2012
Say this
About 41 percent. Eight times is two doublings and a bit: 2 times is 100 percent, 4 times is 300 percent, 8 times is 2 cubed, so the money doubles three times in six years, which is a doubling every two years. A doubling in two years is about 41 percent a year.
Then walk it
- Reframe 8 times as 2 to the power of 3. Three doublings in six years means one doubling every two years.
- The rule of 72 in reverse: 72 divided by 2 years is 36, so roughly 36 percent. That gets you close, and the precise answer is 41 percent because the rule of 72 is an approximation.
- Exact check: 1.41 squared is 2, so a 41 percent annual return doubles money in two years, and three of those gives 8 times.
- Worth memorising the grid, because these come up constantly: 2 times in 5 years is 15 percent, 2.5 times in 5 years is 20 percent, 3 times in 5 years is 25 percent, 2 times in 3 years is 26 percent.
- Then say the practical caveat: IRR is time-weighted, so an early dividend recap flatters it. Money multiple and IRR can disagree, and sponsors quote whichever looks better.
Where candidates lose it
Trying to compute the sixth root arithmetically and stalling. Decompose the multiple into powers of two and use doublings. Interviewers are testing mental agility and whether you know the standard IRR grid cold.
Expect next
- Which is better, 25 percent IRR over 5 years or 30 percent over 3?
- Why can IRR and money multiple disagree?
- How does a dividend recap affect IRR?
Reported by candidates at Warburg Pincus (Private Equity, New York, 2012). Source: Wall Street Oasis.
Firm tags come from public, anonymous candidate reports on Wall Street Oasis: strong signal, not sworn testimony. Firms are named as the places a question was reported, not as partners of Fin Maverick. Answers are written for this page to show how to think out loud; they are not scripts to recite.