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Finance Dictionary and Glossary of Investment Terms
Continuous compounding
Definition 1.
The process of accumulating the time value of money forward in time on a continuous, or instantaneous, basis. Interest is earned constantly, and at each instant, the interest that accrues immediately begins earning interest on itself.
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Definition 2.
The process of earning interest on top of interest. The interest is earned constantly, and immediately begins earning interest on itself.
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Definition 3.
The process of calculating interest and adding it to existing principal and interest at infinitely short time intervals.
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