of CompoundingĪ financial analyst needs to understand the exponential growth equation since it primarily calculates compound returns. Initial Value * (1 + Annual Growth Rate/ No. On the other hand, the formula for continuous compounding is to calculate the final value by multiplying the initial value (Step 1) and the exponential function raised to the power of the annual growth rate (Step 2) over several years (Step 3), as shown above.
0 Comments
Leave a Reply. |