Number e… a very important number that most of us have memorized to about 10 digits, i.e. 2.71828182846, but how do you compute it? Let’s review the definition of number e as it is typically presented, in the problem of compound interest.
Non-compound interest is defined as follows:
A = P * r * t
“Annual equals principal times rate times time.” This tells us how
much interest money is generated over the given time period. If we
want to know the total money, we rephrase the equation as follows,
using I instead of r.
P_t = P_0 * (1 + I * t)
Non-compound quarterly interest that is assigned a yearly interest rate is defined as follows.
P_t = P_0 * (1 + I/4 * (4*t))