Posts Tagged ‘ continuous compounding ’

Paying interest and the number e

January 24, 2011
By
Paying interest and the number e

Suppose I borrow a dollar from you and I’ll pay you 100% interest at the end of the year.  How much money will you have then? $1 * (1 + 1) = $2 What happens if instead the interest is calculated as  50% twice in the year? $1 * (1.5 * 1.5) = $2.25 After … Continue reading...

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