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Money market deposit accounts offer some better yield than traditional savings accounts, according to Bankrate.com. Money market deposit accounts also obtain Fed Deposit Insurance Corp. coverage in the event the deposit fails. In exchange to the better rate, banks typically call for the account to satisfy higher minimum balances to prevent consideration charges. When calculating the attention earned on the account, you require to understand how much you invested, the interest rate, the way lengthy the money will remain in the account and how often interest is compounded.

Trouble: Moderate

Instructions

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Calculator

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1 Separate the annual interest rate on the money market accounts by the number of times per year curiosity compounds to find the periodic rate. To example, if your account compounds curiosity weekly and the annual curiosity rate equals 1. website4 percent, you would divide 1. website4 by 52 to get a weekly rate about website. website2 percent.

3 Add 1 to the periodic rate expressed as a decimal. Furthering the example, you would figure 1 in addition website. website website website2 to get hold of 1. website web site website2.

4 Raise the result from Step 3 to the power about the number of times curiosity will compound on the account. In this example, if you remaining the money in the account for just one year, since interest compounds 52 times per year, you would raise 1. internet site website2 to the 52nd power to secure 1. website1 website453217.

5 Multiply the result out of Stage 4 through the amount of money originally put into the money market account to secure the value of the account after the given time period. In this example, if you put $11,9 web site internet site into the consideration, you would multiply $11,9 internet site website by means of 1. website1 website453217 to find the final worth of the account to be $12, website24.39.

6 Take away the unique sum away from the last amount to discover the interest earned on the money market account. Finishing the example, you would take away $11,9 website website from $12, website24.39 to uncover the interest to be $124.39.

References

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