In five pages the number e is examined in an exploration of its history, contemporary uses along with a discussion of compound interest also included. Five sources are cited in the bibliography.
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in times when interest rates were higher-been a way to get a good rate of return. There were, and still are, banking products that will allow one to take advantage
of compounding and realize the magical effects of compound interest. It does in fact seem magical to many because one can attain great wealth by putting money in the bank
consistency due to compound interest. Almost everyone has seen charts that reveal the great effects of compound interest (OReilly, 1995). Most know that if they reinvest interest and dividends
from a bit of money, it will begin to grow at a rapid pace (1995). That is because each period of time yields higher amounts to invest in. Suppose
someone begins with $1,000 and they get interest to bring that amount to $1,050 in the following period. They have $50 more dollars to invest during the next period of
time. As the years go on, the interest is reinvested, and the investor ends up growing his or her money in the best way possible. While it is easy to
check ones bank statement, it is not always as simple to calculate the way in which compound interest accumulates. A formula to compute
compound interest is as follows. Assuming that the principal is equal to E9 and the amortization period is d10, payments in a year is D11, and the published rate of
interest is D12, and the times per year interest is calculated is d13, then the formula is the following ("Formula," 1998. p.PG):
= Payments = P*I/[1-(I+1)^-T] = E9*(E15/D11)/(1-((E15/D11) +1)**(-1*D10*D11)) Total