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Greetings, GM, and welcome.

<<I just received my 401(k) statement today, and I am trying to analyze my returns.

I know the following three things:

1) The beginning balance.
2) The amount of contributions (which were made in 12 equal chunks over 6 months).
3) The total gains.

Can anyone suggest how I might figure the yield. The simplest thing that I could think of was take (start + contributions/2 + gains)/(start + contributions/2). But this feels a little too linear to me.

It's kind of embarrassing to be a math major and not know this. I can take triple integrals, but I can't figure out simple questions of compound interest.>>

Don't feel bad. Computing compound interest when cash flows are involved isn't really a stubby pencil drill. To get an accurate IRR, you really need a financial calculator. That's why I'm lost without my trusty HP12C at my side.

You can get a rough approximation of return, though, by using the average balance you were playing with. IF:

S = Starting balance
C = Contributions
A = Average balance
E = Ending balance
R = Return

Then: A = (S + C) / 2 and R = (E - A) / E

It's not accurate, but it will give you a rough idea of performance. You could get closer by computing quarterly A's and R's and then averaging the R's, but you don't have that data.

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