Date: Jul 1, 2013 6:11 AM
Author: Robert Hansen
Subject: Re: Simple interest

Joe, I just realized that compound interest is an intuitive proof that e^pi is greater than pi^e. :)

Bob Hansen


On Jun 30, 2013, at 7:59 PM, Robert Hansen <bob@rsccore.com> wrote:

> Simple interest is "simply"...
>
> Principle X Rate X Time
>
> 1000 * 0.06 * 6 = 360
>
> As compared to "compound interest" which "compounds" the interest each period...
>
> 1000 * 1.06 * 1.06 * 1.06 * 1.06 * 1.06 * 1.06
>
> 1000 * 1.06 ^ 6 = 1419 (thus the interest is 419, compared to 360 when doing simple interest)
>
> Note that simple interest involves multiplication and compound interest involves exponentiation.
>
> Bob Hansen
>
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>


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