Show that ln(1+ R) = R for small R.”=” is approximately equal Hint: Use a first-order Taylor approximation around R = 1. (This approximation is often…

Show that ln(1+ R) = R for small R.（”=” is approximately equal）

Hint: Use a first-order Taylor approximation around R = 1.

(This approximation is often used in financial economics. For an interest rate of 3%, the logarithm of the gross return (1+R) is approximately equal to R: ln(1+ 0.03) = 0.03.)