Actuarial Exam 2/FM Prep: Compounding More Often Gives More Growth, Continuous Compounding

Financial Math for Actuarial Exam 2 (FM), Video #10. Exercise *1.4.9 in "Mathematics of Investment and Credit", Samuel A. Broverman, 6th Edition.

Exercise *1.4.9: (a) Show that if j is greater than 0, then the function f (m) =(1+j/m)^m is an increasing function of m. (c) Use l’Hopital’s Rule to show that lim f(m) = e^j as m→∞ (as m goes to infinity)

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