limits

Motivation from compound interest Increase the number of times that the interest is compounded each year ($n$), so as to increase the final amount of money ($A$) $$A = P \left(1 + \frac{r}{n}\right)^{nt}.$$ $t$ and $r$ are the number of years and the interest rate per annum. As $n$ becomes large, we can approximate the amount by $$A = P e^{rt}.$$ The value of $A$ in the above formula is the amount compounded continuously. [Read More]