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So, we learned that the more
times we compound, the more money we make... What if we could
compound continuously?
Let's figure out how the formula for this would work:
We'll invest
$1.00
at 100%
interest for one year and we'll keep increasing the compounding and
see what happens.
A quick example, so
you can follow this:
$1.00 compounded quarterly at
100% interest for
1
year...
initial amount
=
$1
split factor
=
1.25
number of splits
=
4
TRY IT:
Do the same for
compounded monthly.
Let's
make a table:
Continued on the
next
page
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. It goes on forever and ever and
never repeats.
