Interest in Mathematics
It is thought that Jacob Bernoulli discovered the mathematical constant e by studying a question about compound interest. He realized that if an account that starts with $1.00 and pays say 100% interest per year, at the end of the year, the value is $2.00; but if the interest is computed and added twice in the year, the $1 is multiplied by 1.5 twice, yielding $1.00×1.5² = $2.25. Compounding quarterly yields $1.00×1.254 = $2.4414…, and so on.
Bernoulli noticed that if the frequency of compounding is increased without limit, this sequence can be modeled as follows:
where n is the number of times the interest is to be compounded in a year.
Read more about this topic: Interest
Other articles related to "interest":
... monthly payments is augmented by the monthly interest charge and decreased by the payment so , where i = loan rate/100 = annual rate in decimal form (e.g ... in spreadsheet programs can be used to calculate the monthly payment of a loan An interest-only payment on the current balance would be ... The total interest, IT, paid on the loan is ...
... equation is the relationship between nominal and real interest rates, through inflation, and the percentage change in the price level between two time periods ... buys a $1 bond in period t while the interest rate is ... t+1, then the real value of the proceeds from the bond is therefore From here the nominal interest rate can be solved for ...
... In addition to sports, astronomy is also Dr ... Chung's interest ...
... A short-term interest rate (STIR) future is a futures contract that derives its value from the interest rate at maturation ... Common short-term interest rate futures are Eurodollar, Euribor, Euroyen, Short Sterling and Euroswiss, which are calculated on LIBOR at settlement, with the exception of Euribor which is ... This value is calculated as 100 minus the interest rate ...
Famous quotes containing the words interest in, mathematics and/or interest:
“Just as the French of the nineteenth century invested their surplus capital in a railway-system in the belief that they would make money by it in this life, in the thirteenth they trusted their money to the Queen of Heaven because of their belief in her power to repay it with interest in the life to come.”
—Henry Brooks Adams (18381918)
“In mathematics he was greater
Than Tycho Brahe, or Erra Pater:
For he, by geometric scale,
Could take the size of pots of ale;
Resolve, by sines and tangents straight,
If bread and butter wanted weight;
And wisely tell what hour o th day
The clock doth strike, by algebra.”
—Samuel Butler (16121680)
“But what would interest you about the brook,
Its always cold in summer, warm in winter.”
—Robert Frost (18741963)