Continuously compounded rate of return: Difference between revisions

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Revision as of 14:19, 23 October 2012

The more frequently a nominal annual rate of interest is compounded within a given time period, the greater the total interest accrued by the end of the period. Continuous compounding takes this process to its theoretical limit by assuming that the nominal annual interest is calculated and compounded continuously at the given continuously compounded % rate.

See also