1. Guide To Excel For Finance: Introduction
  2. Guide To Excel For Finance: Linking Yahoo! Finance and Other Outside Financial Data To Excel
  3. Guide To Excel For Finance: PV And FV Functions
  4. Guide to Excel for Finance: Annuities
  5. Guide To Excel For Finance: Valuation Methods
  6. Guide To Excel For Finance: Goal Seek
  7. Guide To Excel For Finance: HLookup And VLookup
  8. Guide To Excel For Finance: Ratios
  9. Guide To Excel For Finance: Technical Indicators
  10. Guide To Excel For Finance: Advanced Calculations
  11. Guide To Excel For Finance: Conclusion

The Goal Seek function is a valuable feature that lets the user back into the value for an unknown variable in an equation. For example, the typical financing arrangement for leasing a car will usually provide an interest rate and lease term, such as 6% over 60 months for a car valued at $25,000. Using the PMT formula in Excel, the estimated payment for these lease terms is $483.32.

Here is the layout of the key variables, as well as the output provided by Goal Seek:

Car Loan Repayment Schedule

Interest Rate

0.06

Loan Duration

60

Total Loan Amount

25000

Payment

$483.32 

 

But let's say you have a few extra dollars and are interested in knowing how long the loan will last when you spend $500 a month for the same 6% interest rate. Using Goal Seek, here is what the inputs would look like:

 

 

According to Goal Seek, upping the monthly payment slightly would shave more than two months off the loan duration. Here are the outputs:

Car Loan Repayment Schedule

Interest Rate

0.06

Loan Duration

57.6801385

Total Loan Amount

25000

Payment

$500.00 

 

 


Guide To Excel For Finance: HLookup And VLookup
Related Articles
  1. Personal Finance

    How Interest Rates Work On Car Loans

    Three big facts to know – and some numbers to crunch to get the best deal.
  2. Personal Finance

    Car Title Loan Limits

    You can usually get 25% to 50% of a car's value - but could pay more in interest than you borrowed if the loan rolls over a lot before it's paid off.
  3. Retirement

    Business Owners: A Guide To Qualified Retirement Plan Loans

    Thinking of adding a loan feature to your company's plan? Here's what you need to know.
  4. Investing

    New Wheels: Lease Or Buy?

    These two major ways to obtain a car have very different advantages and drawbacks. Find out which is best for you.
  5. Personal Finance

    How Long Should It Take to Save for a Down Payment?

    As housing prices and the cost of living rise, it can take longer to sock away the means to make a big purchase.
  6. Personal Finance

    10 Tips to Topple Student Loan Debt

    How to manage those burdensome payments as you embark on adult life.
  7. Personal Finance

    Simple Interest Loans: Do They Exist?

    Yes, they do. Here is what they are – and how to use them to your advantage.
  8. Personal Finance

    Schedule Loan Repayments with Excel Formulas

    Calculate all the particulars of a loan using Excel, and set up a schedule of repayment for a mortgage or any other loan.
  9. Personal Finance

    Home Improvement Loans: What Are Your Best Options?

    If you plan on taking out a home improvement loan, you should know what your options are and which ones might be best for your situation.
Frequently Asked Questions
  1. Do interest rates increase during a recession?

    Learn why interest rates do not rise in a recession; in fact, the opposite happens. Identify the factors that reduce interest ...
  2. What is the difference between deflation and disinflation?

    Learn what deflation and disinflation are, how supply and demand affect price levels, and the difference between deflation ...
  3. What rights do all common shareholders have?

    Learn what rights all common shareholders have, and understand the remedies that can be taken if those rights are violated ...
  4. What does CHIPS UID mean?

    Learn what CHIPS UID stands for and how it facilitates the transfer of funds as the back-end of the ACH network for both ...
Trading Center