Compounded Continuously Number. In the formula a represents the final amount in the account that starts with an initial principal p using interest rate r for t years. Consider the example described below.
N is the number of times interest is compounded in a year. In this case the number of periods when compounding occurs is infinite. So fill in all of the variables except for the 1 that you want to solve.
So fill in all of the variables except for the 1 that you want to solve.
To calculate continuously compounded interest use the formula below. Continuous compounding is the mathematical limit that compound interest can reach if it s calculated and reinvested into an account s balance over a theoretically infinite number of periods. The calculation assumes constant compounding over an infinite number of time periods. In this case the number of periods when compounding occurs is infinite.
