What is e (2.718…) and why does it literally appear everywhere?
In: 756
Not quite 5 but here’s my explanation for my precal kiddos. So, the basis is an exponential equation. So a linear equation has the same thing added each time right, so like each next x value adds 5 to the y value. Well, an exponential equation multiplies it by the same thing every time. So we take our x value and multiply it by the same value for each new y value.
Ok so, lets use the exponential equation with 2 in it. So, y=2^x well this equation only “compounds yearly” for a problem. As in, its only being multiplied once a year. So what happens if we compound it more often than a year? Well there’s an equation for that but theres not really a need to get into that unless you’d like me to in another comment. So back to compounding, what if we compound it every month, well it will have more money at the end of that year, how about every week? More money at the end of the year, every day? More money. Eventually though, you can only get so much more by compounding more and more often. This number that they came to was 2.718… the number e. So for continuously compounding we use e.
Hope this helped!
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