Continuous compounding, Financial Accounting

The excessive frequency of compounding is generally continuous compounding where the interest is compounded immediately. The data for continuous compounding for one year is eAPR here e is 2.71828 that is the base of the natural logarithm. So the future value of an amount which is compounded for n years is:

FV = PV x ekn

Here k is annual percentage rate and ekn is the compound factor.

Posted Date: 4/9/2013 2:30:48 AM | Location : United States







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