What is Continuously Compounded Interest? Continuously compounded interest is interest that is computed on the initial principal, as well as all interest other interest earned.
The idea is that the principal will receive interest at all points in time, rather than in a discrete way at certain points The continuous payment of interest leads to exponential growth and is many times used as an argument for wealth creation.
Albert Einstein is credited with the phrase “Compound interest is the most powerful force in the universe.” While it is undetermined if he actually said it, it says a lot about the importance of the concept.