Continuous Compounding Calculator
Calculate growth with continuous compounding and compare it with daily, monthly and yearly compounding.
Continuous compounding is the mathematical limit. Interest is added at every instant.
It uses the constant e, about 2.718. No bank offers it, but it is the ceiling for what compounding can do.
How it works
The formula is the starting amount times e raised to the rate times the years. The calculator shows daily, monthly and yearly results alongside it.
The differences are small. That is the lesson here.
The formula
e = 2.71828..., r = rate as a decimal, t = years.
Tips
- If two accounts differ only by compounding frequency, pick the higher rate and ignore the frequency.
- Continuous compounding appears in finance theory and option pricing more than in real accounts.
Frequently asked questions
Is continuous compounding much better than daily?
No. On $10,000 at 6% for 10 years the difference is under $2.
This is not financial advice. Nothing on this site is investment, tax, legal or financial advice of any kind.
The calculators give simplified estimates from the numbers you enter. They ignore taxes, fees, rate changes and real market returns, and they can be wrong.
Do not make financial decisions based on these results. Speak to a licensed financial adviser, accountant or lender before acting, and read the full disclaimer.