Question 285747
Continuous Compounding Formula is:


P(t) = P(0) * e^(k*t) where:


P(t) = Future Value
P(0) = Present Amount
k = Annual Interest Rate
t = Number of Years


Discrete Compounding Formula is:


P(t) = P(0) * (1+(k/c)^(t*c) where:


P(t) = Future Value
P(0) = Present Amount
k = Annual Interest Rate
t = Number of years
c = Compounding periods per Year.


If the annual interest rate is 1%/100% = .01, and if the compounding periods per year are equal to 1 (annual compounding), then:


Your continuous compounding formula would be:


P(t) = P(0) * e^(.01*t)


Your discrete compounding formula would be


P(t) = P(0) * (1.01)^t