>>11228685Say you loan money out at 50% annual interest
If you calculate interest once a year, this means that once a year you multiply the balance by 1.5
Then you decide to calculate interest four times a year instead of once. The honest thing to do would be that four times a year you multiply by the fourth root of 1.5, approx 1.1067, so that after a year the balance has grown 50%. HOWEVER, what you instead do is divide that 50% into four chunks of 12.5%, and then four times a year you multiply the balance by 1.125, so that after one year you've multiplied by 1.125^4 = 1.6018. Therefore tricking your debtor into paying an effective 60% annual interest instead of the advertised 50%.
Then you figure, hey if it works for n=4 times a year, then I'd better shrink it more. So you divide 50% by 12 and charge (50/12)% interest monthly, for an annual growth by (1+.5/12)^12 = 1.632, for an even better 63% return.
Then you figure you'll do it daily, for an annual interest factor of (1+.5/365)^365=1.648.
Then you figure, I'd better be charging interest every nanosecond of every single day. So you calculate the limit of (1+.5/n)^n as n goes to infinity, and it turns out that this is the number e^.5 = 1.648 for a particular number e=2.716... where in fact, e is the limit of (1+1/n)^n, and it turns out that lim (1+r/n)^n as n goes to infinity is e^r.
>tl;dr e is the limit of (1+1/n)^n, invented to fuck you over financially with (((compound interest))) 
