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  • Writer's pictureMartin Scarratt

1. e and Compound interest

The number e can seem a bit of a mystery when you first meet it – usually at A-level.

Where does it come from? How was it discovered? Why does it have the amazing properties that we are told it has?

None of these things are ever really explained, we are just given the number and told to use it, following the rules and using the properties we are told it has.

The first place this number comes up in the history of Maths is (perhaps surprisingly) in a paper concerned with the calculation of compound interest. The paper was published in the early 17th century and so the number e has only been around for the last 400 years or so. Compared to pi, which has been around for thousands of years it is a very modern number indeed. Its importance wasn't realised until about 100 years later when Euler discovered its uses when working with Calculus (which was only invented about 50 years earlier than that, by Newton and Leibniz).

In this article I will detail what that original discovery was back in the early 1600s and how it came about.

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