How to calculate Continuously Compound Interest

To visit an online calculator for this purpose, go to http://matrixlab-examples.com/calculate-compound-interest.html

I'm gonna show you how to calculate a continuously compounded interest. It has to do with financial math.

Let's solve this problem... we're asked to find the amount of an investment if 40,000 are invested at 6.5% continuously compounded for 5 years.

Then, the principal is 40,000 the annual rate is 6.5 and the time is 5 years.

This is the formula to be used: p is the principal, e is the base of natural logarithms, r is the annual rate, and t is the time in years.

The formula finds out the amount of money that you'll have after those years.

In our case the principal is 40 thousand, the nominal rate per year is 6.5% and the time is 5 years

Let's use the calculator that we have prepared for that purpose: http://matrixlab-examples.com/calculate-compound-interest.html

We just fill in the blanks with our data...

we enter the principal, now we enter the interest rate per year, now the time in years...

We can modify the numbers just to study other scenarios or cases... and we get the final amount with continuously compounded interest

Thank you for watching!