\left(1+\frac{1}{n} \right)^n = 1 + \binom{n}{1}\frac{1}{n} + \binom{n}{2}\frac{1}{n^2}+....
= 2+ \frac{1}{2} \left(1-\frac{1}{n} \right)\left(1-\frac{2}{n} \right)+\frac{1}{3!} \left(1-\frac{1}{n} \right)\left(1-\frac{2}{n} \right) \left(1-\frac{3}{n} \right)
< 2+ \frac{1}{2!} +\frac{1}{3!}+\frac{1}{4!}+...+\frac{1}{n!}
But we know that n!> 2^n for n>3.
So we continue the chain of inequalities by noting that the quantity is therefore less than 2 + \frac{1}{2} + \frac{1}{4}+...<3