CP Algebra II 03/08/26
The Number e
Name
nt
 r 
Recall the compound interest formula: A  P 1 
. Suppose a bank pays 100% interest, r =1, on
 n 
$1 for one year. Calculate the amount of money in the account at the end of one year for each
compounding method. What do you think will happen to the value of A?

Compounding Method
Formula
A
Annually
(1 time per year)
Quarterly
(4 times per year)
Monthly
(12 times per year)
Weekly
(52 times per year)
Daily
(365 times per year)
Hourly
(8760 times per year)
Every Minute
(525600 times per year)
Every Second
(31536000 times per year)
The number e is used in the formula, A  P  ert . This formula is used to model continuous
compounded exponential growth and decay.
e = 2.718281828459045….