I would like to know how they figure the interest on a Money Market account. If my broker tells me my money in my account earns 4.16 % per month. How is it figured? On my Money Market account the interest goes back into it. What figures do I use? Thank you, Susan

Catseyes

Unless I am mistaken, it works the same as other types of accounts.

Example : you have $1000 in an account at 4.16%/m ( ! ): at the end of the month, you will have earned $41.6 as interests, thus your balance would be $1041.6.

But you make interest with interests : next month, you would also earn interest on those 41.6, not just on 1000.

4,16% per month seems high though ! ( what 's the name of your bank !? )

Now, if it's per year ( much more likely ):
1000 x 0.0416 / 12 = $3.47 interests on the 1st month.
second month : ( 1000 + 3.47 ) x 0.0416 /12
and so on...

ScottGem

The thing is there is no actual standard. It depends on the account. For example I have a MM acount thru my bank that pays interest compounded daily. I have another thru PayPal, that pays interest monthly based on the closing balance for the month.

Bottom line; ask the institution for a detailed explanation. They HAVE to give it to you.