In this article we will learn about how and where we can use to Goal seek to forecast the business on the basis of present scenario in Microsoft Excel 2010.
If we know the result which we are looking for then we can find out the value of one cell by changing the value in another cell. In other words, Goal Seek tells the user to enter the input as to get a certain output.
Excel’s Goal Seek feature allows the user to change the data used in the formula in order to find out what the output will be.
Let us understand how PMT Function works:
The PMT function returns the payment amount of a loan based on an interest rate and a constant payment schedule.
PARAMETERS OF PMT FUNCTION
Type is optional. It indicates when the payments are due.
Type 0(Default): Payments are due at the end of the period.
Type 1: Payments are due at the beginning of the period.
Let us understand with an example:
We are calculating Loan Repayment Schedule. We have Interest Rate as 7%, Number of Payments as 60 (5 x 12), Loan Amount is $ 60,000. Payment function calculates the payment for a loan based on constant payments with a constant interest rate
Initial Payment every month is $ 1,188.07. Let’s say we have less amount to be paid every month which is $ 1,000
To calculate how many payments will get increased from 60, we will use Goal Seek function in Microsoft Excel.
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