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
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