subject: Compound Interest Formula Continuously: The Letter E [print this page] Compound interest formula continuously was created in order for us to fully understand what continuous compounding is. This variation of compound interest formula aids in getting the total cash amount of an investment that has an interest that is being compounded continuously. The compound interest formula continuously can also be used in calculators. Such calculators will be able to compute for the total cash amount, original cash amount or principal amount, interest rate per year, or the investment time period.
The compound interest formula continuously is made up of variables.
We have T for the total cash amount after the interest is added to the principal amount of the said investment or loan.
We have P for the principal cash amount or the original invested or loaned amount of cash.
We have r for the interest rate of the investment or loan per year.
We have y for the number of years as the time period of the loan or the investment.
We Also Have A Special Variable In The Compound Interest Formula Continuously Which Is Actually Not A Variable Because It Has A Constant Numeric Assignment.
The letter e in the compound interest formula continuously has the approximate constant numeric assignment of 2.718. Using a calculator, you can just push the e button present in it to get the precise value of e.
What is the different compound interest formula continuously with the corresponding missing element?
To get the total cash amount of the investment of loan, here is the compound interest formula continuously:
T = Pe^ry
To get the principal cash amount or the original invested or loaned amount of cash, here is the formula:
P = T / e^ry
To get the interest rate of the investment or loan per year, here is the formula:
r = ln (T / P) / y
To get the number of years as the time period of the loan or the investment, here is the compound interest formula continuously:
y = ln (T/P) / r
Here are compound interest formula tips and warnings.
Although the compound interest formula continuously is not that much used by the monetary organizations that you will encounter everyday, it is still good to know about it. Why? So that, we will be able to know how much is the biggest amount that the principal or original cash amount could get up to. This, of course, depends on how much the interest rate if of our investment or loan is. Just be reminded, that the compound interest formula continuously should only be used with interest compounding continuously. Other types of compounding have corresponding formulas for them.
