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July 3rd, 2011, 06:55 PM   #11
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Re: Effective interest rate compounded every two months

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Originally Posted by Erimess
I'll have to trust how you got there. We were just shown a chart that made m a 10, then 100, then 1000, etc., and showed how it tended towards e. But I've never learned why e is what it is, only how to use it for this one thing.
It was never explained satisfactorily to me until college! Suffice it to say that it's a very useful number, and that it is equal to 1/0! + 1/1! + 1/2! + 1/3! + ... = 1 + 1 + 1/2 + 1/6 + ....
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July 3rd, 2011, 08:09 PM   #12
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Re: Effective interest rate compounded every two months

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Originally Posted by Erimess
I'll have to trust how you got there...
One way is as follows:











Application of L'H˘pital's rule gives:







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July 3rd, 2011, 10:00 PM   #13
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Re: Effective interest rate compounded every two months

I don't know what you're doing. I know the infinity symbol, but I don't know how to use e and I don't know what ln means. (I can use those to solve for specific stuff that I have memorized, and I do mean just memorized plug n chug with no knowledge behind it.) So you lost me from the start.

You don't need to try to explain it - you'd have to explain from scratch too many things I don't know. Since I've forgotten most of high school, it's easier to just pretend I stopped after 9th grade algebra. (Yes, I know more than that, but it's more specialized business stuff.)
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