Future Value of a Lump Sum with Continuous Compounding

 In the previous section, the Future Value of a lump sum is calculated with a fix number of compounding periods. The Future Value of a Lump Sum with Continuous Compounding means that the Future Value is calculated with infinite number of compounding periods.





Formula of Future Value of a Lump Sum with Continuous Compounding

FVn=PV*e^(r*n)
  • PV is Present Value
  • r is the interest rate
  • n is the period. For example 5 years.
  • e is 2.71828
Open up the Future Value.xls spreadsheet and look into the Worksheet Future Value(Continuous Compound).

Next :
Future Value of an Ordinary Annuity

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