Objective 6. Use Goal Seek
Goal Seek is a method to find a specific value for a cell by adjusting the value of one other cell. With Goal Seek, you can work backward from the desired outcome to find the input necessary to achieve your goal. If you have a result in mind, you can try different numbers in one of the cells used as an argument in the function until you get close to the answer you want.
Activity 3.13. Using Goal Seek to Produce the Desired Result
Darron knows that his budget cannot exceed $4,500 per month for the truck loan. The trucks meet the specifications necessary to do the job and Darron has found the best price. Now he has two optionsborrow less money and get fewer trucks, or extend the time to repay the loan. To find out how much can be borrowed for three years to stay within the budget, or how much to increase the repayment period, you will use the Goal Seek command.
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Click cell B5. From the Tools menu, click Goal Seek. In the Set cell box, confirm that B5 is displayed.
The cell address in this box is the cell that displays the desired result.
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2. |
Press
Figure 3.30. |
3. |
In the displayed Goal Seek dialog box, click OK. In the displayed Goal Seek Status dialog box, click OK.
Excel's calculations indicate that to achieve a monthly payment of $4,500.00, Darron can borrow only $145,739not $180,000.
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4. |
Click A7. Type Option #1 - Reduce the Loan and press
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5. |
Select the range A2:B5 and click Copy
Figure 3.31. Recall that with the Paste Special command, you can copy the value in a cell, rather than the formula, and the cell formats are retained.
More Knowledge: Savings Accounts Using the Future Value Function Another commonly used financial function, similar to the PMT function, is the Future Value function. The function has three required arguments: Rate, Nper, and Pmt. The Rate argument is the interest rate paid to you by the financial institution; the Nper is the number of periods; and Pmt is the amount you deposit into the account each period. The function also has two optional argumentsPv and Type. The Pv argument is the amount you start with in the account. Excel assumes this is zero if you do not provide a starting amount. The Type argument assumes that the payment is made at the end of the time period. |
Activity 3.14. Using Goal Seek to Find an Increased Period
For Darron's truck purchases, an alternative to borrowing less moneywhich would mean buying fewer truckswould be to increase the number of years of payments.
1. |
In cell B2, type 180000 and then press
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2. |
In the Set cell box, confirm that B5 is displayed. Press
Figure 3.32. |
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3. |
Click OK two times to close the two dialog boxes.
Excel's calculations indicate that by making payments for 3.8 years3.806819743a monthly payment of $4,500.00 is achieved.
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4. |
Click A13. Type Option #2 - Increase Years and press
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5. |
Select the range A2:B5, click Copy
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6. |
Click B15. On the Formatting toolbar, click the Decrease Decimal button
Figure 3.33. |
7. |
Display the Page Setup dialog box. Center the worksheet Horizontally and create a Custom Footer with the file name in the left section. Close the dialog box and Save
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[Page 821 (continued)] Objective 7 Create a Data Table
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