You know π belongs to circles… but what about e?
Imagine a magical bank offering 100% interest per year. You deposit $1, wait a year, and walk away with $2. Simple.
But what if the bank compounds your interest twice a year—50% every six months?
After 6 months: you have $1.50.
Now you earn interest not just on $1, but on $1.50.
By the end of the year: $1.50 (1.50 × 0.5) = $2.25.
You just made more than doubling your money.
Naturally, you say: “Do it faster.”
Daily. Every second. Continuously. Mathematically, this becomes:
(1 1/n)ⁿ
As n (the number of compounding periods) grows larger and larger, something incredible happens…
You hit a limit.
No matter how fast you compound, the value approaches 2.718…
In 1748, Leonhard Euler recognized this number as a universal constant and named it e.
And no—it wasn’t named after him. It simply emerged from the mathematics of growth itself. From finance to physics, from biology to probability—e is everywhere. Not bad for a number born from compounding interest.