Calculate Effective Annual Rate for 6% Compounding Indefinitely

[JimmyJockstrap]

periods.

Like (1+6%/100)^100-1=0.061817441

(1+6%/1000)^1000-1=0.061834635


does it converge to a limit of like 0.06184 or something like that?

 

[DrGreg]

$$e^x = \lim_{n \to \infty} \left( 1 + {x \over n} \right)^n.$$


http://en.wikipedia.org/wiki/Exponential_function#Formal_definition

 

[HallsofIvy]

And for x= 0.06, that limit is e^.06-1.

 

[JimmyJockstrap]

how would you solve that limit would you use l'hopitals or something like that?