Question 157377
you can go to yahoo or google and search on "continuous compounding" and get many answers.
here is the url to one of them.

http://www.frickcpa.com/tvom/TVOM_Continuous.asp

continuous compounding is an infinitely small interval of time taken an infinitely large number of times per year. 

example:
annually = 1 interval per year.
monthly = 12 intervals per year.
daily = 365 intervals per year.
hourly = 365*24 intervals per year.
every minute = 365*24*60 intervals per year.
every second is 365*24*60*60 intervals per year.
every time you multiply the interval, you divide the interest rate.
so annually = annual interest rate divided by 1.
monthly = annual interest rate divided by 12.
daily = annual interest rate divided by 365.
.......
every second is annual interest rate divided by (365*24*60*60).
as the number of periods per year approaches infinity, the interest rate approaches 0 for each period.
there are formulas to derive that and they are used to get an effective annual rate assuming continuous compounding.