Exponential

From ACT Wiki
Jump to navigationJump to search
The printable version is no longer supported and may have rendering errors. Please update your browser bookmarks and please use the default browser print function instead.

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.


See also