Reading: Continuous Income Stream
In precalculus, you learned about compound interest in that really simple situation where you made a single deposit into an interest-bearing account and let it sit undisturbed, earning interest, for some period of time.Compound Interest Formulas
Let P = the principal (initial investment), r = the annual interest rate expressed as a decimal, and let A(t) be the amount in the account at the end of t years.- Compounding n times per year:
- Compounded continuously: