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what is the formula for continuous compound interest. When interest is continuously compounded use where is the interest rate on a continuous compounding basis and r is the stated interest rate with a compounding frequency n. The continuous compounding formula determines the interest earned which is repeatedly compounded for an infinite time period.
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The continuous compounding formula can be found by first looking at the compound interest formula where n is the number of times compounded t is time and r is the rate. R Interest Rate. The importance of this article is to get you excited about compound interest and to teach you the ability to understand the continuous compound interest formula.
An investor is given the option of investing 1000 for 5 years in two deposit options.
To calculate compounded interest and determine how much money will be owed after a specific amount of time we must use the continuous compound interest formula. The continuous compounding formula determines the interest earned which is repeatedly compounded for an infinite time period. Continuously Compounded Interest is a great thing when you are earning it. Consider the following example.
