# Continuous Compounding

*Math & Statistics — Finicade finance glossary*

Compounding not yearly or monthly but in infinitely small instants — the mathematical limit, powered by the number e. It's the clean, calculus-friendly way rates are handled in derivatives pricing.

**Related terms:** [Compound Interest](https://finicade.com/glossary/compound-interest), [Logarithm](https://finicade.com/glossary/logarithm), [Discount Factor](https://finicade.com/glossary/discount-factor)

**Taught in:** Hull Street — Interest Rates, Essentials

Source: https://finicade.com/glossary/continuous-compounding