Hello all(adsbygoogle = window.adsbygoogle || []).push({});

Let [tex] \delta t [/tex] be a timestep. Then the mean is equaled to [tex] \mu\delta t [/tex] where [tex] \mu [/tex] is a constant. Assuming a nornal distribution, [tex] \frac{S_{i+1}-S_{i}}{S_i} = \mu\delta t [/tex]

[tex] S_{i+1} = S_i(1 + \mu\delta t) [/tex]. Hence after M timesteps we have:

[tex] S_m = S_0(1+\mu\delta t)^M = S_0e^{Mlog(1+\mu\delta t)} \doteq S_{M}=S_{0}e^{[\mu M(\delta t)]}= S_0e^{\mu T} [/tex] How do we get the last part (the approximation)?

Thanks

**Physics Forums | Science Articles, Homework Help, Discussion**

Join Physics Forums Today!

The friendliest, high quality science and math community on the planet! Everyone who loves science is here!

The friendliest, high quality science and math community on the planet! Everyone who loves science is here!

# Homework Help: Timescales physics problem

**Physics Forums | Science Articles, Homework Help, Discussion**