SOLUTION: What is the formula for finding interest using natural logs and e? What is the difference between compounding continuously and compounding anually?
Question 453285: What is the formula for finding interest using natural logs and e? What is the difference between compounding continuously and compounding anually? Answer by stanbon(75887) (Show Source):
You can put this solution on YOUR website! What is the formula for finding interest using natural logs and e?
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The formula for compounding continuously is A(t) = P*e^(rt)
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What is the difference between compounding continuously and compounding anually?
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Annual compounding is A(t)=P(1+(r/n))^(nt) where n = 1
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The Compounding continuously formula results from taking
the limit of (1+(r/n)^(nt) as n approaces infinity.
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Cheers,
Stan H.
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