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.
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Famous quotes containing the words interest in, interest and/or mathematics:
“In the middle years of childhood, it is more important to keep alive and glowing the interest in finding out and to support this interest with skills and techniques related to the process of finding out than to specify any particular piece of subject matter as inviolate.”
—Dorothy H. Cohen (20th century)
“They were evidently small men, all wind and quibbles, flinging out their chaffy grain to us with far less interest than a farm- wife feels as she scatters corn to her fowls.”
—D.H. (David Herbert)
“Why does man freeze to death trying to reach the North Pole? Why does man drive himself to suffer the steam and heat of the Amazon? Why does he stagger his mind with the mathematics of the sky? Once the question mark has arisen in the human brain the answer must be found, if it takes a hundred years. A thousand years.”
—Walter Reisch (1903–1963)