Concept: Goal Seek
Goal Seek is a type of optimization tool; it determines the value that you need to enter in a
single input cell to produce the result that you want in a dependent (formula)
cell.
Example: You are buying a car and you can afford a loan payment of $500 per month.
Goal Seek can tell you the purchase price that you can afford.
Enter beginning values and a payment formula into the workbook:
A | B | Notes | |
|---|---|---|---|
1 | Purchase Price | 29900 | The amount you would like to spend. |
2 | Loan Term in Months | 48 | |
3 | Interest Rate | 4.25% | |
4 | Payment | =PMT(B3/12,B2,-B1) | Formula to calculate the payment. |
Navigate to and enter these values:
- Set Cell: B4
- To Value: 500
- By Changing Cell: B1
Optionally you can enter a minimum and/or a maximum value that you want Goal Seek to
return.
When you click OK, Goal Seek changes the value in B1 to the purchase price value that causes
the payment in B4 to equal $500.
You can discover more about the goal seek functionality on the Internet, along with
information about the golden section, golden ratio, and tau.