Thanks! So, the red 1 represents the 100% interest we intend to earn; the pink n in the denominator represents the compounding pieces we divide it into.
For example, an approximation of e would be (1 + .01)^100, where the 100% interest had been chopped into 100 separate segments of 1%.
For example, an approximation of e would be (1 + .01)^100, where the 100% interest had been chopped into 100 separate segments of 1%.