One of the most important limits in calculus is

limx0(1+x)1/x=e

where e is an irrational number (like π) and is approximately 2.718281828.

We are not going to prove that such a limit exists, but we will content ourselves by plotting y=(1+x)1/x (Figure 1), and show graphically that as x0, the function y=(1+x)1/x takes on values in the near neighborhood of 2.718, and therefore e2.7182.

 

Figure 1. Graph of y=(1+x)1/x. Note that this function is not defined at x=0.

 

As x approaches zero from the left, y decreases and approaches e as a limit. As x approaches zero from the right, y increases and also approaches e as a limit.

As x, y approaches the limit 1, and as x1 from the right, y increases indefinitely (see Table 1).

Table 1

 

Let’s replace 1/x by u. So when x0, we have u. Thus

limx0(1+x)1/x=limu(1+1u)u=e.

In other words:

limx(1+1x)x=e