Compounding Frequency, and Where Continuous Compounding Comes From
(1 + r/n)^n rises with n but converges on e^r. At 6 percent, monthly and continuous compounding differ by $1.59 on $10,000 over a year. At 24 percent the same gap is $30.07, and over thirty years it is 7.4 percent of the balance.
Camille Laurent · 11 min read