Where does e come from?
PERHAPS THAT'S THE BEST QUESTION OF THE DAY!!!!!!!!!!
It comes from this relation= FV(1 + i/n)^n,
Now, what does that mean? It means that if I lent you $1 and charged you interest at 100% for 1 year, then at the end of that year you would owe me $2. But if I told you that 100% interest rate is compounded DAILY, then you would owe me: FV=(1 + (1/365))^365 =$2.714567......at the end of the year. Now, if I said to you that the interest rate is compounded every second!!!!!How much would you owe me then. Well, if we go to that formula: (I'm just using rough number of seconds in a year)
FV=(1 + (1/30,000,000))^30,000,000=2.718281828........etc., which is the maximum amount you owe me on the original $1 that I lent you. This is an extremely important number in Math.
It can also be derived in other ways such as: e= 1 +1 + 1/2! +1/3! +1/4!........and so on FOREVER!!!!.
I HOPE YOU UNDERTOOD THAT AND GOOD LUCK.
+33661 Lots of places! See http://mathworld.wolfram.com/e.html for mention of several of them.
Where does e come from?
PERHAPS THAT'S THE BEST QUESTION OF THE DAY!!!!!!!!!!
It comes from this relation= FV(1 + i/n)^n,
Now, what does that mean? It means that if I lent you $1 and charged you interest at 100% for 1 year, then at the end of that year you would owe me $2. But if I told you that 100% interest rate is compounded DAILY, then you would owe me: FV=(1 + (1/365))^365 =$2.714567......at the end of the year. Now, if I said to you that the interest rate is compounded every second!!!!!How much would you owe me then. Well, if we go to that formula: (I'm just using rough number of seconds in a year)
FV=(1 + (1/30,000,000))^30,000,000=2.718281828........etc., which is the maximum amount you owe me on the original $1 that I lent you. This is an extremely important number in Math.
It can also be derived in other ways such as: e= 1 +1 + 1/2! +1/3! +1/4!........and so on FOREVER!!!!.
I HOPE YOU UNDERTOOD THAT AND GOOD LUCK.
