How does continuous compounding benefit an investor, Financial Management

How does continuous compounding benefit an investor?

The effect of enhancing the number of compounding periods per year is to increase the future value of the investment.  The more often interest is compounded, the larger the future value.  The minimum compounding period is used when we do continuous compounding--compounding that takes place every tiny unit of time (the smallest unit of time imaginable).

 

 

Posted Date: 6/17/2013 3:09:23 AM | Location : United States







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