1. What is a Money Market Fund?

A Money Market Fund (MMF) is a type of mutual fund that invests in short-term, high-quality debt instruments in Kenya. It offers investors high liquidity with relatively low risk compared to other investments.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

Where:

• \( Principal \) — Initial investment amount in KES
• \( Rate \) — Annual interest rate (in decimal form)
• \( Time \) — Investment period in years
• \( 365 \) — Daily compounding factor

Explanation: The formula calculates daily compounding interest over the investment period to determine the future value of your investment.

3. Importance of MMF Calculations

Details: Accurate MMF calculations help investors project returns, compare different investment options, and make informed financial decisions in the Kenyan market.

4. Using the Calculator

Tips: Enter principal in KES, annual rate as decimal (e.g., 0.08 for 8%), and time in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How accurate is this calculator for Kenyan MMFs?
A: This provides a close estimate, but actual returns may vary slightly due to fund management fees and slight rate fluctuations.

Q2: What are typical MMF rates in Kenya?
A: Rates vary but typically range between 7% to 12% annually, depending on market conditions.

Q3: Are MMFs taxable in Kenya?
A: Yes, MMF returns are subject to 15% withholding tax on the interest earned.

Q4: How liquid are Kenyan MMFs?
A: Most funds allow withdrawals within 24-48 hours, making them highly liquid investments.

Q5: What's the minimum investment for Kenyan MMFs?
A: Minimums vary by provider but typically start from KES 1,000 for retail investors.