Compound Interest: Introduction
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good job
what if the interest is continuously compounding?
what formula do you use?
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The formula for continuous compounding is FV = Pe^(rt) where r is the annual rate and t is the time (in years). In practical terms the result of continuous compounding will be the same as compounding daily (or hourly) unless P is really big.The formula is the result of applying limits to the formula that uses discrete periods.
westofvideo 1 year ago