# Interest - Interest in Mathematics

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.

### Other articles related to "interest":

Interest - Formulae
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Fisher Equation - Derivation
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### 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.

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 (1612–1680)

But what would interest you about the brook,
It’s always cold in summer, warm in winter.
Robert Frost (1874–1963)