Which interest should be used? lame, interest, exercise, compound, 365

prashantsahni

I think it may sound lame. When i read reading 70 on Option, in the section of Lower bounds, the present value of the exercise price is X/(1+r)^T. I wonder why they use the compound formula instead of X/(1+r*T) since T=number of expiring days/365.
Please help me with this.