A continued fraction can be seen as a way to approximate numbers with increasingly involved fractions. For example for $\pi$ it is $$\pi=3+\frac{1}{7+\frac{1}{15+\frac{1}{1+\dots}}}$$ Define $\pi_n$ as the number you get by only including $n$ terms in this continued fraction. I plotted the absolute error $|\pi_n-\pi|$ here below:
My question is about the jump at 292. 292 is a large number so I would expect that adding this term wouldn't increase precision by much. My reasoning is as follows. Consider the innermost nested fraction that still includes 292: $$\frac{1}{1+\frac{1}{292}}$$ Now, if I remove 292, I will essentially remove $1/292$. Like this: $$\frac{1}{1+0}$$
I removed a small number since 292 is a large number. Therefore, I would expect a small jump when going from $n=4$ to $n=5$. But instead I see a large jump so obviously my reasoning is not correct. What would be the correct reasoning?
The Mathematica code I used to create the plot:
piN[n_] := FromContinuedFraction[ContinuedFraction[\[Pi], n]]
error = Table[
Labeled[{n, Abs[piN[n] - \[Pi]] // N},
ContinuedFraction[\[Pi], n][[-1]]], {n, 1, 10}];
ListLogPlot[error, PlotRange -> Full,
AxesLabel -> {n, "Absolute Error"},
PlotLabel -> "|\!\(\*SubscriptBox[\(\[Pi]\), \(n\)]\)-\[Pi]|"]

You are correct that $1+\frac1{292}$ is a small difference, but is much close to its goal than $1+\frac12$ is to $1.414.$
Let's use this specific case. We are trying to approximate $\alpha_n=1.003417231013373.$ Already, we are close, but the difference between $\frac1n$ and $\frac1{n-1}$ is $\frac1{n(n-1)},$ so, when the next term is a large coefficient, we are getting significantly closer than when we get a coefficient of $1,$ which can be up to $1/2$ off the mark.
Indeed, $\left|\frac1{292} -\alpha_n\right|<\frac1{100000}.$ $1+\frac1{292}$ is $460$ times closer to $\alpha_n$ than $1$ is.
It is possible for a coefficient of $1$ to be a great coefficient, if for example, $\alpha=1.9999992.$ But even then, the next coefficient with be very large and get is much closer.
But on average, a coefficient of $c$ is off by $\frac1{2c(c+1)}.$
If $0<\alpha<1,$ and $\frac1c>\alpha>\frac{1}{c+1},$ then $\frac1c-\alpha<\frac1{c(c+1)}\approx\alpha^2.$ So yes, you integer component was only off by a small $\alpha$ initially, but you square that small number to get the new error - in layman terms, you double the number of significant digits of accuracy.