ACT Preparation / Unit 12 ACT 1108 short lesson, about 20 seconds
The Number e
Captions available
The idea
The number e, about 2.718, is the base of continuous growth. Continuously compounded interest is A = Pe^(rt).
In practice
$1,000 at 6% compounded continuously for 2 years: 1,000e^(0.12), about $1,127.50.
Where people slip
e is a constant like π, not a variable; e^(rt) is the limit of compounding more and more often.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Builds on
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