Continuous Compounding Calculator
Works out growth with continuous compounding and shows how little it adds over monthly compounding.
Final amount
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Share sends a link that reopens these numbers. Copy details pastes the full breakdown as a list.
Interest earned —
With monthly compounding —
With yearly compounding —
Effective annual rate — %
The formula
A = P × e^(rt)
Continuous compounding is the limit as the compounding periods get infinitely short. It is the most any compounding schedule can reach at a given nominal rate.
What to watch out for
It is mainly used in finance theory and options pricing. Many bank accounts compound daily or monthly.
Frequently Asked Questions
What is the formula for continuous compounding?
A = Pe^(rt). 10,000 at 5% for 10 years becomes 16,487.21, against 16,470.09 compounded monthly.
What is e in the formula?
A mathematical constant of about 2.71828. It appears because it is the limit of (1 + 1/n)^n as n grows without end.