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What is Continuous Compounding

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 The extreme frequency of compounding is continuous compounding where the interest is compounded instantaneously. The factor for continuous compounding for one year is eAPR where e is 2.71828 the base of the natural logarithm. The future value of an amount that is compounded for n years is

FV = PV x e^kn

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

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