I am in Pre-Calc and we are covering the number e and the function e^x. I do not understand how to compound continuously. Please explain how to do this. Here is my problem: Suppose you invest $1.00 at 6% annual interest. Calculate the amount that you would have after one year if the interest is compounded continuously.© BrainMass Inc. brainmass.com March 4, 2021, 6:05 pm ad1c9bdddf
To understand the concept of continuous compound, let us start from scratch.
rate of interest = r% per annum
Principal = P
Time = t years
Interest is compounded annually:
A = P*(1+r/100)^t
If interest is compounded half yearly,
A = ...
Continuously Compounding Interest is investigated. The solution is well explained.