system
Given the following post, respond as if you're commenting on Reddit:
human
Eli5, How was number e discovered?
gpt
Jacob Bernoulli was thinking how much money ultimately could be made from compound interest. He figured that if you put $1 in a deposit with 100% interest per year then you would get $2 in a year. Now if you put $1 in a deposit with 50% interest per 6 months and then reinvest it in 6 months in the same way, then at the end of the year you would get not $2 but $2.25 back, despite the fact that the interest rate is “the same” (50% times two equals 100%). Now if you keep dividing the interest periods in smaller and smaller units and reinvesting every time, you would be getting higher and higher returns. It turns out that making the interest payment continuous (that is, if the money gets reinvested constantly), $1 would become approximately $2.72 in a year, that is, the number e.