Financial Mathematics → Interest → Simple Interest → Compound Interest → Continuous Interest

The basis for continuous compound interest. See the following example to know the basis for continuous interest.

**Example 1.**

Suppose $1,000 is deposited in a savings account that earns compounded interest at a rate of 10% per year. How much will be in the account after 1 year if interest is compounded:

(a) Yearly

(b) Semi-annually

(c) Quarterly

(d) Monthly

(e) Weekly

(f) Daily

(g) Hourly

(h) Every minute

**Solution:**

**(a)** yearly

Answer

**(b)** Semi-annually

Answer

**(c)** Quarterly

Answer

**(d)** Monthly

Answer

**(e)** Weekly

Answer

**(f)** Daily

Answer

**(g)** Hourly

Answer

**(h)** Every minute

Answer

In the above example, note that as h goes smaller and smaller (daily, hourly every minute etc.) the value of accumulated amount takes a limiting value.

**Next:** Accumulation Factor