Appendix C

The Exponential Functions ex and e− x

For some reason certain numbers and expressions occur more frequently than others in natural phenomena. One of these is the number “e” and is defined by the following expression (written to only four decimal places; e is a so-called irrational number and therefore does not have a finite decimal representation), e = (1 + 1/n)n = 2.7183 … as n approaches infinity.

The exponential function is defined as f(x) = ex, where x is some arbitrary exponent. This function appears in many contexts in the natural world and is the solution to a number of equations related to physical processes that characterize risk. The exponential function is also the solution to simple first order differential equations that ...

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