Nice video to see and recall Euler’s Number for math savvy investors:
It is used to understand continuous compounding interest and in option valuations too (Black-Scholes Formula).
1. Continuous Compounding:
FV = PV e^(rt)
Where:
FV = Future value
PV = Present value
e = 2.718..
r = Interest rate
t = Time in years
2. Black-Scholes model; https://www.investopedia.com/terms/b/blackscholes.asp
#Expotential explained: https://www.youtube.com/watch?v=m2MIpDrF7Es
Options, Futures & Other Derivatives, Uncategorized
Euler’s Number