1. What is Money Market Return?

Money market return represents the profit earned from a money market investment, calculated as the difference between the future value and the principal amount invested.

2. How Does the Calculator Work?

The calculator uses the simple return formula:

Where:

• \( \text{FV} \) — Future value of the investment
• \( \text{Principal} \) — Original amount invested

Explanation: This calculation shows the absolute return in currency terms from a money market investment.

3. Importance of Return Calculation

Details: Calculating money market returns helps investors assess the performance of their short-term investments and compare different investment options.

4. Using the Calculator

Tips: Enter the future value and principal amount in dollars. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between return and yield?
A: Return is the absolute profit in dollars, while yield expresses return as a percentage of the principal.

Q2: Are money market returns guaranteed?
A: Money market returns are not guaranteed but are generally more stable than other investments.

Q3: How often are money market returns calculated?
A: Returns are typically calculated daily but paid monthly.

Q4: Are returns taxable?
A: Yes, money market returns are generally subject to income tax.

Q5: What factors affect money market returns?
A: Returns are primarily influenced by interest rate movements and the credit quality of the investments.