Compound interest and exponential functions

Use the sliders to change the annual interest rate (APR) and the number of times per year interest is compounded.[br]Notice that the red graph is how interest works: there is no change until the end of the period, then interest is computed and added.[br]The green graph, h(x), is the exponential function that grows at the interest rate per year, but it grows continuously.[br]The purple graph, k(x), shows continuous compounding: if interest is added every instant. This is the most you can get by shortening the compounding period.

Information: Compound interest and exponential functions