Continuously compounded rate of return: Difference between revisions
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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. | 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. | 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 == | == See also == | ||
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* [[Effective annual rate]] | * [[Effective annual rate]] | ||
* [[Nominal annual rate]] | * [[Nominal annual rate]] | ||
[[Category:The_business_context]] | |||
Latest revision as of 20:33, 27 June 2022
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.
