how does continuous compounding benefit an, Financial Management

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how does continuous compounding benefit an

How does continuous compounding benefit an investor?

The influence of increasing the number of compounding periods every year is to increase the future value of the investment. The more often interest is compounded, the greater the future value. The smallest compounding period is employed while we do continuous compounding--compounding that takes place each tiny unit of time (the smallest unit of time imaginable).

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