Remember the Compound Interest Formula? (It’s alright if you didn’t, for now…)
Here it is:
A = P(1 + (r/n))nt
Where…
P => Principal
r => annual interest rate (as a decimal)
n => number of compoundings in a year
t => time in years
A => accumulated value
Now, there’s a formula for Continuously Compounded Interest.
This means roughly that interest is compunded infinitely many times per year.
Here’s the formula:
A = Pert
Where…
P => Principal
A = accumulated value
r => annual interest rate
t => time in years
e = Euler’s number
We also have the Exponential Growth and Decay Model(s):
n(t) = n(0)ert
Where…
n => whatever is growing or decaying exponentially
r => relative growth rate (as a decimal)
t => time
n(0) => initial value of ‘n’ (value of ‘n’ corresponding to when t=0)