1. What is Money Market Deposit?

A money market deposit is a fixed-term investment that typically offers higher interest rates than regular savings accounts. The future value calculation helps investors understand how much their investment will grow over time.

2. How Does the Calculator Work?

The calculator uses the simple interest formula:

Where:

• \( FV \) — Future Value (maturity amount)
• \( Principal \) — Initial investment amount
• \( Rate \) — Annual interest rate (as decimal)
• \( Time \) — Investment period in years

Explanation: The formula calculates the total return on a money market deposit using simple interest, where interest is earned only on the principal amount.

3. Importance of Money Market Calculations

Details: Understanding potential returns helps investors compare different investment options and plan their financial goals effectively.

4. Using the Calculator

Tips: Enter the principal amount in dollars, annual interest rate as a percentage (e.g., 2.5 for 2.5%), and time period in years (can use decimals for partial years).

5. Frequently Asked Questions (FAQ)

Q1: Is this calculator for simple or compound interest?
A: This calculator uses simple interest calculation, which is common for many money market deposits.

Q2: How accurate is this calculation?
A: This provides an estimate assuming the interest rate remains constant and no withdrawals are made during the term.

Q3: Are money market deposits FDIC insured?
A: Money market deposit accounts at banks are typically FDIC insured up to applicable limits, unlike money market mutual funds.

Q4: What's the difference between APR and APY?
A: APR (Annual Percentage Rate) doesn't account for compounding, while APY (Annual Percentage Yield) does. This calculator uses APR.

Q5: Can I use this for other simple interest calculations?
A: Yes, this calculator works for any simple interest calculation, not just money market deposits.