Ah. Thank-you. That was the part I wasn't getting. For the benefit of others: . . . "Continuous compounding is the mathematical limit that compound interest can reach. It is an extreme case of compounding since most interest is compounded on a monthly, quarterly or semiannual basis. Hypothetically, with continuous compounding, interest is calculated and added to the account's balance every infinitesimally small instant. While this is not possible in practice, the concept of continuously compounded interest is important in finance." (investopedia.com) . . . Also there is a nice explanation at moneychimp.com .