A common misunderstanding is that if a bunch of investors pool their stocks, they’ll earn more compounding interest on the larger pooled principal than they would individually, or conversely that a stock should not be split or it will earn less interest.
The continuously compounding exponential return formula is
P(t) = P0 e^rt
Note that only time enters the argument of the exponent, not the principal. So the returns are invariant to divisions of the principal (ignoring human behavior effects).
The continuously compounding exponential return formula is P(t) = P0 e^rt
Note that only time enters the argument of the exponent, not the principal. So the returns are invariant to divisions of the principal (ignoring human behavior effects).