Continuous Compounding Interest Rates |
The Gamma Function |
L'Hospital's Rule is used to prove that the compound interest rate equation through continuous compounding equals Pe^rt. (Manacheril)
Continuous compounding interest rates encountered everyday in investments, different types of bank accounts, or when paying credit cards bills, mortgages, etc. |
The Gamma function is used to model the factorial function. Because the common way to determine the value of n! was inefficient for large "n"s, the gamma function was created, an integral formula for n!. L'Hopital's rule is used in proving the Gamma Function along with using integration by parts. (Gamma Function)
The Gamma Function is used in engineering, quantum physics, astrophysics, fluid dynamics, statistics, combinatorics, probability theory, etc. Specifically, it is often used in Gamma distributions, which are used in statistical models for predicting different kinds of natural events including the interval of time between earthquakes. (Rice) |
In short, L'Hospital's rule has many applications in the real world, predominantly in statistics, physics, and engineering!