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My question is on data rate and baud rate.

data rate = baud rate * n

The question is, can you keep on increasing the data rate by increasing baud rate or number of bits.

I believe it can be increased by increasing the baud rate but what about the latter part?

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    $\begingroup$ What is this $n$ in your formula? This makes no sense to me. The baud rate is usually higher than the data rate. Please explain. $\endgroup$ – Ran G. Jul 25 '15 at 17:11
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    $\begingroup$ please also add the units you use for each term. $\endgroup$ – Ran G. Jul 25 '15 at 17:18
  • $\begingroup$ Data Signalling Rate is also known as gross bit rate. So I guess yeah with the increase in bit rate, data rate will increase. $\endgroup$ – Sagnik Jul 25 '15 at 17:19
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Theoretically you can, but in reality you can not. The problem in raising the number of bits one symbol represents is that you have to space the symbol levels closer and closer together. Therefore even small amounts of random noise lead to misinterpreted symbols. A first attempt at calculating the maximum data rate is Nyquist's formula:

maximum data rate [bit/s] = $2H\cdot log_{2}(V)$

Where $H$ is the bandwidth in $Hz$ and $V$ is the number of symbol values.

This formula indicates that unlimited data rate can be achieved when enough symbol levels are used, but, as we have already seen, that is not possible because of random noise. Shannon's formula takes that into account:

maximum data rate [bit/s] = $H\cdot log_{2}(1 + S/N)$

Where $S$ is the signal strength and $N$ is the noise level.

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