Finance & Interest
Advanced

Continuous Compounding

Value with interest compounded continuously.

Formula

A=PertA = P e^{rt}

Variables

PPrincipal
rRate
tTime

Example

$1000 at 5% compounded continuously for 3 years: 1000·e^0.15 ≈ $1161.83.

Did You Know?

Compounding more and more often approaches a limit set by the number e — continuous compounding.

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