Exponential: Difference between revisions
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1. ''Financial maths - constant.'' | |||
The exponential ''constant'' is a mathematical constant with a value of roughly 2.718282..., usually denoted by the letter ''e''. | |||
2. ''Financial maths - function.'' | |||
The related exponential ''function'' is ''e''<sup>x</sup> (''e'' to the power of x). The exponential function in Excel is =EXP( ). The exponential function is the inverse of the natural logarithm. | |||
3. ''Growth.'' | |||
Exponential ''growth'' means growth other than straight-line. | |||
For example, the series 100, 200, 400... is growing exponentially. | |||
4. ''Decay.'' | |||
Exponential ''decay'' means the reduction in a variable, for example over time, on a basis other than straight-line. | |||
For example, the reduction in the time value of an option, as its remaining time to maturity expires. | |||
== See also == | == See also == | ||
* [[Exponential function]] | * [[Exponential function]] | ||
* [[Financial maths]] | |||
* [[Natural logarithm]] | * [[Natural logarithm]] | ||
* [[Option]] | |||
* [[Time value]] | * [[Time value]] | ||
[[Category:The_business_context]] | |||
Latest revision as of 19:32, 25 March 2021
1. Financial maths - constant.
The exponential constant is a mathematical constant with a value of roughly 2.718282..., usually denoted by the letter e.
2. Financial maths - function.
The related exponential function is ex (e to the power of x). The exponential function in Excel is =EXP( ). The exponential function is the inverse of the natural logarithm.
3. Growth.
Exponential growth means growth other than straight-line.
For example, the series 100, 200, 400... is growing exponentially.
4. Decay.
Exponential decay means the reduction in a variable, for example over time, on a basis other than straight-line.
For example, the reduction in the time value of an option, as its remaining time to maturity expires.
