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Define The Number "E" Euler's Number

e is an important irrational number that is approximately equal to 2.71828. It is often called Euler's number after mathematician Leonhard Euler. e is the base of natural logarithms and appears in many areas of mathematics, including calculations involving compound interest where e represents the continuous compounding of interest over time.

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Yehia Khaled Essam Fawaz ICSBR1
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94 views4 pages

Define The Number "E" Euler's Number

e is an important irrational number that is approximately equal to 2.71828. It is often called Euler's number after mathematician Leonhard Euler. e is the base of natural logarithms and appears in many areas of mathematics, including calculations involving compound interest where e represents the continuous compounding of interest over time.

Uploaded by

Yehia Khaled Essam Fawaz ICSBR1
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Define the number “e”

Euler’s number
e (Euler's Number)

The number e is a famous irrational number, and is one of the most important numbers in
mathematics.

The first few digits are:

2.7182818284590452353602874713527 (and more ...)

It is often called Euler's number after Leonhard Euler.

And Euler is spoken like "Oiler".

e is the base of the Natural Logarithms (invented by John Napier).

e is found in many interesting areas, so it is worth learning about.

Calculating
There are many ways of calculating the value of e, but none of them ever give an exact answer,
because e is irrational (not the ratio of two integers).

But it is known to over 1 trillion digits of accuracy!

For example, the value of (1 + 1/n)n approaches e as n gets bigger and bigger:
n (1 + 1/n)n
1 2.00000
2 2.25000
5 2.48832
10 2.59374
100 2.70481
1,000 2.71692
10,000 2.71815
100,000 2.71827

Another Calculation
The value of e is also equal to 1/0! + 1/1! + 1/2! + 1/3! + 1/4! + 1/5! + 1/6! + 1/7! + ... (etc)

(Note: "!" means factorial)

The first few terms add up to: 1 + 1 + 1/2 + 1/6 + 1/24 + 1/120 = 2.718055556

And you can try that yourself at Sigma Calculator.

Remembering
Or you can remember the curious pattern that after the "2.7" the number "1828" appears TWICE:

2.7 1828 1828

And following THAT are the angles 45°, 90°, 45° in a Right-Angled Isosceles (two equal angles)
Triangle:

2.7 1828 1828 45 90 45

(An instant way to seem really smart!)

Advanced: Use of e in Compound Interest


Often the number e appears in unexpected places.

For example, e is used in Continuous Compounding (for loans and investments):


Formula for Continuous Compounding

Why does that happen?

Well, the formula for Periodic Compounding is:

FV = PV (1+r/n)n

where FV = Future Value


PV = Present Value
r = annual interest rate (as a decimal)
n = number of periods

But what happens when the number of periods heads to infinity?

The answer lies in the similarity between:

(1+r/n)n and (1 + 1/n)n


Compounding Formula e (as n approaches infinity)

By substituting x = n/r :

 r/n becomes 1/x and


 n becomes xr

And so:

(1+r/n)n becomes (1+(1/x))xr

Which is just like the formula for e (as n approaches infinity), with an extra r as an exponent.

So, as x goes to infinity, then (1+(1/x))xr goes to er

And that is why e makes an appearance in interest calculations!

Transcendental
e is also a transcendental number.

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