Remember the general rule for limits of this type:
\[ \lim_{n\to\infty} \left(1 + \frac{a}{n}\right)^{bn} = e^{ab} \]
Applying this rule to our problem where \(a = 1\) and \(b = 2\):
\[ \lim_{n\to\infty} \left(1 + \frac{1}{n}\right)^{2n} = e^{1 \times 2} = e^2 \]
This general formula allows you to solve similar limits instantly.