Microsoft Office Tutorials and References
In Depth Information
Goal Seek
FIGURE 16.2 The Payment Function Arguments Window
FIGURE 16.3 The Results and the Formulas of the Model
GOAL SEEK
Goal Seek is used to check what would happen to an input or an assumption if we
wanted the end result to be different from the result obtained. In our example, we will
fine-tune the monthly payment of $564.05 to obtain a different solution or value.
What would happen if you could not afford the amount of $564.05 as your pay-
ments? What should you do if you could pay only $530 a month?
You can use Goal Seek to evaluate various possible inputs, generating different
scenarios:
You can try and purchase a less expensive car.
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You can put down a larger down payment.
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You can repay the loan over a longer period (more than three years).
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You may negotiate a lower interest rate.
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Goal Seek will allow you to change only one parameter at a time, all the other
parameters need to remain the same as originally defined. We will see later on how
to use other Excel tools for a What-if analysis, allowing more than one parameter to
change in order to achieve a desired outcome.
 
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