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Equation 5 · Part 7 · AI Inference Economics in Practice: An Advanced Technical Guide

superscript

R∗=w−r1−rR^{*} = \frac{w - r}{1 - r}
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What this part means

A raised number can be a power. When it is a label or bound, it selects a case or the upper limit of a sum; the formula’s structure distinguishes these uses.

Its job in the formula

A raised mark can be a power or an index. Its position and the surrounding notation determine which.

The passage around this formula

That convergence on roughly one tenth of base input for a cache read — independently verified today across all three platforms [ 2 , 6 , 10 ] — supports a design rule. Let w be the write-price multiplier for the chosen retention window and r ≈\approx 0.1 the read-price multiplier. For a prefix served identically R times within that window — the first serving is the write, the remaining R-1 are reads — caching beats never caching once R∗=w−r1−rR^{*} = \frac{w - r}{1 - r}. is exceeded. At Anthropic’s five-minute rate, w = 1.25 and R∗R^{*} ≈\approx 1.28 : the prefix pays for itself starting with the first read after the write, matching the break-even Anthropic’s pricing page states for that duration [ 6 ] . At the…

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Learn the underlying idea

An exponent tells how a base is used in multiplication. In x³, x is the base and 3 is the exponent: x³ = x × x × x.

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Sources cited in the surrounding passage

These citations provide research context; check each source for the exact claim it supports.