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







Related Discussions:- Continuous compounding, Assignment Help, Ask Question on Continuous compounding, Get Answer, Expert's Help, Continuous compounding Discussions

Write discussion on Continuous compounding
Your posts are moderated
Related Questions
Choice of an appropriate discount rate The difficulty with selecting a discount rate rests on whether the correct rate for the risk/return has been derived. A number of things

Public Oversight Board (POB) - POB is an independent oversight board, composed of public members that monitors and evaluates peer reviews conducted by SEC Practice Section (SECPS)

Trust - Ancient legal practice where one person (GRANTOR) transfers the legal title to an ASSET, known as principal or corpus, to another person (the TRUSTEE), with specific instr

A new shopping mall is considering setting up an information desk staffed by one (1) employee. Based upon information obtained from similar information desks, it is believed that p

Below is information about the spot and forward rates for three currencies against the US dollar (USD): Currency (exchange rate) Spot Rate Six-month forward rate Euro (EUR)

Illustration of maximum possible loss method A, B and C have been partners for several years, sharing profits and losses in the ratio 2:2:1. They decided to dissolve the firm o

For what EDP is using in accounting

Flying High Inc. plans to raise $5,000,000 external financing by issuing bonds, and is considering two options: regular bonds & zero couple bonds.  The regular bonds will have coup

Q. What is Staff Benefit Fund? This is a fund intended to afford certain kinds of amenities and benefits to no gazetted staff as well as to gazetted officers of the Railway ove

I am working on a bank reconciliation problem. How should I record the following transaction on the company's cash record? (10/31/13 Bank Rec) A two month, 8%, $1350 customer's not