I know how to find C.I but how does one find it for "Compounding Continuously"??

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- Apr 21st 2006, 09:03 PMaskmemathCompound Interest for Continuous compounding
I know how to find C.I but how does one find it for "Compounding Continuously"??

http://img530.imageshack.us/img530/8050/a1q127qy.jpg - Apr 22nd 2006, 06:30 AMJameson
This is where one of the most important numbers of modern mathematics comes in - e.

$\displaystyle e=\lim_{x\rightarrow\infty}(1+\frac{1}{x})^x$

And when compounding continuous interest the formula is:

$\displaystyle A=Pe^{rt}$

where A is the new amount, P is the principal amount, e is a constant, r is the growth rate, and t is time.