Investment
Continuously compounded interest
The limiting case as the compounding frequency grows without bound. It gives the maximum possible result for a given nominal rate, and is used in derivatives pricing and theoretical finance rather than consumer accounts.
The Formula
A = P · e^(rt)
The limiting case as the compounding frequency grows without bound. It gives the maximum possible result for a given nominal rate, and is used in derivatives pricing and theoretical finance rather than consumer accounts.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| e | Euler's number | constant | Approximately 2.71828. |
What Each Symbol Means
econstant
Euler's number
Approximately 2.71828.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate compound interest page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Compound Interest, filed under Finance. Every number the guide produces comes from substituting into this one line.