Your retirement account may or may do as well as you predicted. Interest rates can drop, lowering your returns. If you've contributed to an account that invests in stocks, your account can even lose value. You can compare your current balance to your target savings to gauge your account's performance, but a more precise metric is the account's annual percentage rate. The account's APR measures its annual growth rate, which acts on increasingly large principal as you contribute further to your account.
Type the account's current balance into a financial calculator, and then press the "FV" key.
Type your annual contribution to the account into the calculator and then press the "PMT" key.
Type "0" into the calculator to represent the retirement account's initial balance, and then press "PV."
Type the number of years for which you have contributed to the account, and then press the "n" key.
Press "compute" and "i" to calculate your retirement account's to-date annual percentage rate.
Items you will need
- Financial calculator
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