19/11/2021



Power function

  0.243        2/10       4/100        3/1000
x           = x     *    x        *   x

               1/10     1/10     1/100    1/100    1/100    1/100    1/1000    1/1000     1/1000
	    = x     *  x      * x      * x      * x      * x       * x       * x       * x


                     1/100                              100
	where   a = x         is the number such that  a    = x




Fractional exponents are very important in finance because they are used to calculate compound returns.


For example:

8% over 3 years =

	    (1/3)
	[1.08    - 1] x 100 	p.a. as an annual return