Optical properties of silver nanoparticles with different diameters are investigated based on the electronic structures of component silver atoms. Within the frame of tight binding method, the local density of states of each silver atom is obtained through a recursive approach that extracts the required information directly from the Hamilton matrix. Then the interaction between the electric field of incident light and electrons in the nanoparticles is simulated to characterize their optical features and the size effects were interpreted according the results.

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