Answer to Question #140538 in Economics for one

Question

1. Given the formula F = P(1 + i)n. If the n = ∞, it will be formed as:

a. interest rate
b. simple interest
c. discount
d. continuous compound

Answer 1

Continuous compounding is the mathematical limit that compound interest can reach if it's calculated and reinvested into an account's balance over a theoretically infinite number of periods.

So, given the formula F = P(1 + i)n, if the n = ∞, it will be formed as:

d. continuous compound.