How do they calculate interest in a money market account?

[pulse8]

This may seem like a stupid question, but I've never really dealt with interest in this manner.

If a money market account has a 1.98% interest rate and a 2% APY, how much would you make in interest each for about $3,000?

How does the bank do the calculations?

 

[Hector13]

google is your friend:

http://www.getobjects.com/Components/Finance/TVM/iy.html

 

[phatj]

That only tells you so much...

I'd also like an anser (I'm currently trying to find something understandable to read...)

For example, MetLife Bank offers a Rate of 1.98 compounded daily with an APY of 2.00.

How would I calculate earnings if I invested... say,,, $20,000 and held it for 10 years?

 

[alrocky]

http://www.bankrate.com/brm/calc/cdc/CertDeposit.asp

Bankrate.com has a financial calculator. Looks like they compound interest daily. $3000 nets you $59.99 in interest in one year. $20000 nets you $4379.12 interest after 20 years.

My credit union's rate is 3.25%, 3.3% APY.

 

[Sluggo]

Lets say you have $10,000, there is a complex formula about 3 pages long, but in the end you get about $1.84