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# Continuously Compounded Interest

Formula for Continuously Compounded Interest

To calculate continuously compounded interest use the formula below. In the formula, A represents the final amount in the account that starts with an initial (principal) P using interest rate r for t years. This formula makes use of the mathemetical constant e .

Continuously Compounded Interest is a great thing when you are earning it! Continuously compounded interest means that your principal is constantly earning interest and the interest keeps earning on the interest earned!

## Practice Problems

$$A = Pe^{rt} \\ A = 2,000\cdot e^{.13 \cdot 20} \\ A = \boxed{ \26,927.47}$$