One path to the number e:
Is the compound interest formula, where
- A = amount
- P = principal (amount invested, owed, ...)
- n = number of times per year interest is compounded
- t = time
Let's see what happens if we invest $1 and compound interest for different
n.
So if we compound interest at every moment (continuously), the values "close
in" on a special number. We call that number e.