September 2022
Beginner
560 pages
17h 36m
English
Equation (2.7) gives the proceeds of investing
for
periods at the rate
, which is compounded
times per year. By the definition of
, there are
periods over
years. Therefore, with
, (2.7) becomes,
Under continuous compounding, interest is paid every instant, so that the proceeds of an investment that is continuously compounded over
years grows to the limit of Equation (A2.1) as approaches infinity. Taking ...