Question: In Example 5.6.10, we considered the effect of continuous compounding of interest. Suppose that S0 dollars earn a rate of r per year compounded continuously

In Example 5.6.10, we considered the effect of continuous of interest. Suppose that S0 dollars earn a rate of r per year compounded continuously for u years. Prove that the principal plus interest at the end of this time equals S0eru. Suppose that interest is compounded n times at intervals of u/n years each. At the end of each of the n intervals, the principal gets multiplied by 1+ ru/n. Take the limit of the result as n → ∞.

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