单词 | continuous compounding |
释义 | continuous compounding The charging of interest or discounting of future receipts on a continuous basis. At a rate of 100r per cent, added annually, after N years a loan will have grown to (1 + r)N times its original value. If interest is added v times a year, it will grow to (1 + r/v)N, which is greater the larger is v. As v tends to infinity, (1 + r/v)Nv tends to a limit erN, where e is the exponential constant. Similarly, if a future receipt due in N years is discounted to find its present value at a continuous rate r, its present value with continuous discounting is e-rN times what is due at the end of the N years. |
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