Use the Binomial Formula [(a+b)^{n}=sum_{k=0}^{n}left(begin{array}{l}n kend{array}ight) a^{k} b^{n-k}] to show (a) [e=lim _{n ightarrow infty}left(1+frac{1}{n}ight)^{n}=sum_{k=0}^{infty} frac{1}{k !}]
Question:
Use the Binomial Formula
\[(a+b)^{n}=\sum_{k=0}^{n}\left(\begin{array}{l}n \\k\end{array}ight) a^{k} b^{n-k}\]
to show
(a)
\[e=\lim _{n ightarrow \infty}\left(1+\frac{1}{n}ight)^{n}=\sum_{k=0}^{\infty} \frac{1}{k !}\]
Hint:
\[\begin{aligned}\left(1+\frac{1}{n}ight)^{n} & =\sum_{k=0}^{n} \frac{n !}{k !(n-k) !} \frac{1}{n^{k}} \\& \ldots \\& =\sum_{k=0}^{n} \frac{1}{k !} B(k, n)\end{aligned}\]
where
\[B(k, n)=\frac{n(n-1) \ldots(n-(k-1))}{n^{k}} \text { for each } k\]
(b) Use the Binomial Formula to show
\[e^{x}=\lim _{n ightarrow \infty}\left(1+\frac{x}{n}ight)^{n}=\sum_{k=0}^{\infty} \frac{x^{k}}{k !}\]
Hint: Let \(n=m x\), and evaluate \((1+x / n)^{n}=(1+x /(m x))^{m x}\).
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Related Book For
Mathematical Techniques In Finance An Introduction Wiley Finance
ISBN: 9781119838401
1st Edition
Authors: Amir Sadr
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