Logarithms
The loop approach to compound interest scales linearly with n, while the closed form is a single exponentiation. The logarithm is the inverse of the exponential function. A closed-form compound-interest expression produces the same result…
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The loop approach to compound interest scales linearly with n, while the closed form is a single exponentiation. The logarithm is the inverse of the exponential function. A closed-form compound-interest expression produces the same result as iteration in a single operation. At a 5% annual return, logarithms imply an investment doubles in about 14.2 years. Logarithms are useful for solving equations where the unknown is an exponent.