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Using Goal Seek

From: Excel 2013 Essential Training

Video: Using Goal Seek

Excel has a number of analytical tools and they fall under the heading What-If Analysis. You'll see these on the Data tab in the ribbon. One of them is GoalSeek. And the description we see on the screen doesn't really do it justice. Find the right input for the value you want. In this worksheet called GoalSeek, there's a function in cell M5. You may have seen it; it's called PMT. What we're trying to do in this particular cell is calculate the monthly payment for a loan of $24,000 based on a 60 month term.

Using Goal Seek

Excel has a number of analytical tools and they fall under the heading What-If Analysis. You'll see these on the Data tab in the ribbon. One of them is GoalSeek. And the description we see on the screen doesn't really do it justice. Find the right input for the value you want. In this worksheet called GoalSeek, there's a function in cell M5. You may have seen it; it's called PMT. What we're trying to do in this particular cell is calculate the monthly payment for a loan of $24,000 based on a 60 month term.

Interest rate is 3.5%. The answer that we get here is 437. So, if you borrow $24,000, pay it off over five years at 3.5% interest then, monthly payment is $437. Imagine a situation where you want a different answer. Maybe it's based on a real life wish that you want this to be lower or maybe you're saying, I know I was planning all along on spending 500 month, let's just make this answer to be 500 or 400 as the case may be. GoalSeek feature in a certain sense let's us work backwards.

It doesn't use sophisticated math, it uses brute force. We're going to say, we want this to be a different answer. Click this cell on the Data tab, choose What-If Analysis, choose GoalSeek. Here's the Goal Seek dialogue box. We want to set this cell M5 to be the value 500. By changing which cell, Goal Seek only allows us to change one cell. The function in cell M5 is based on data from M2, M3 and M4.

We can only change one of these. Suppose it's the principal at cell M4. If we're going to be spending 500 a month, we will be able to borrow more but how much? Click OK, and we see that amount 27,485. If we click OK, we keep the result. If we click Cancel we return to the original values. You might want to try this feature changing just the principal as I did or possibly change in the rate. You might not have control over that. If the borrowing institution allows you to change the term but keep the same amount, you might want to cancel, try this again, What-If Analysis, GoalSeek.

This time let's set the cell to be equal to the value 500, based on the term changing. Click OK. So, we could pay $500 instead of 437 and then pay off our loan in 52 months instead of 60. So, there are certainly different ways to use this. Let's take another case, scrolling down in the same worksheet. We're taking a course somewhere and here are the scores we've got on various tests. At the bottom here, in cell M14 is a formula that's averaging the cells, and recognize that it's averaging the empty cell as well; and the way this function works, if you work with it, you know that Excel adds up the data that it sees but it divides by the number of cells that have data.

So currently it's adding up the numbers and dividing by 6, but as soon as we put a number in this cell M13, the average will add up those numbers and divide by 7. So we want this average to be 90, so it can get an A. We'll go to What-If Analysis, GoalSeek, set this cell M14 to be equal to 90 by changing which cell, the cell that's currently empty, M13. Click OK, and oddly enough it seems to take a while to get there.

And finally when it does get there we get our answer and it's not too satisfactory, we got to get 102, well we can't do that. So, let's cancel this. Maybe if we get 89.51 we'll get our A, so let's try this again. What-If Analysis, GoalSeek, set this cell M14 to be equal to 89.5, by changing which cell, this empty cell again M13, click OK. So, if we ace this final test and get a 99, looks like we got to get that then we'll get our 89.5 average.

Maybe we'll get the A after all. Now, let's take more business like situation here. Column H has a bunch of salaries, over 700 of them. New salaries that have been calculated based on the old salary and a percent increase of 2.7%. So, every one of these salary calculations is based at least partially on this 2.7% in cell J2. A total in J1 of all those entries in column H is 38,889,000. Let's imagine you are the chief financial officer of this organization and you say, well, in our prior planning we were planning on 39 million expenditure on salaries.

Let's make this be 39 million. In other words, let's recalculate all 700 or so of these formulas so that our total is now 39 million. So when you use GoalSeek here, What-If Analysis, GoalSeek, and we want that cell J1 to be equal to 39 million 39,000,000 you don't to put in the comas but you can. By changing which cell, the cell that's got the percent in it. Now you saw how long it took with our example of those test scores, how long is this going to take? Click OK, it's done.

There it is, if we want to keep it we'll click OK. Looks like 3% is what we need here. Now, when you use GoalSeek, don't assume these answers are exactly what you see. If I click the cell, this is the one that change from 2.7%, I click this cell, look in the formula bar. It's really 2.99175 et cetera; it's a big long number up there. Now, someone has to make an exacted decision and decide what to do, so you might just Double-Click and change that to 2. 99 and it's probably going to be close enough.

There we go, but as I press Enter our total will change. It'll be a bit lower, not a whole lot lower. So, you can see how this feature works. It's ideal for working backwards so to speak. We want a different answer for our formula and we can do this by using GoalSeek to change one of the cells, that's a component of that formula.

Show transcript

This video is part of

Image for Excel 2013 Essential Training
Excel 2013 Essential Training

82 video lessons · 69978 viewers

Dennis Taylor
Author

 
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  1. 1m 6s
    1. Welcome
      43s
    2. Using the exercise files
      23s
  2. 29m 37s
    1. What is Excel used for?
      1m 49s
    2. Using the menu system
      4m 30s
    3. The Quick Access Toolbar
      4m 41s
    4. The structure of a worksheet or workbook
      3m 41s
    5. Using the Formula bar
      1m 43s
    6. Using the Status bar
      2m 24s
    7. Navigation and mouse pointers
      2m 20s
    8. Shortcut menus and the Mini toolbar
      3m 24s
    9. Using the built-in help
      2m 54s
    10. Creating new files
      2m 11s
  3. 24m 1s
    1. Exploring data entry and editing techniques
      4m 41s
    2. Entering data with AutoFill
      4m 6s
    3. Working with dates and times
      3m 32s
    4. Using Undo and Redo
      4m 50s
    5. Adding comments
      2m 55s
    6. Using Save or Save As
      3m 57s
  4. 30m 7s
    1. Creating simple formulas: Totals and averages
      5m 25s
    2. Copying a formula for adjacent cells
      2m 54s
    3. Calculating year-to-date profits
      3m 9s
    4. Creating a percentage-increase formula
      4m 7s
    5. Working with relative, absolute, and mixed references
      4m 7s
    6. Using SUM and AVERAGE
      3m 25s
    7. Using other common functions
      7m 0s
  5. 46m 7s
    1. Exploring font styles and effects
      4m 7s
    2. Adjusting row heights and column widths
      3m 37s
    3. Working with alignment and Wrap Text
      4m 2s
    4. Designing borders
      3m 26s
    5. Exploring numeric and special formatting
      5m 36s
    6. Formatting numbers and dates
      4m 31s
    7. Conditional formatting
      4m 21s
    8. Creating and using tables
      9m 59s
    9. Inserting shapes, arrows, and other visual features
      6m 28s
  6. 20m 40s
    1. Inserting and deleting rows and columns
      4m 52s
    2. Hiding and unhiding rows and columns
      4m 2s
    3. Moving, copying, and inserting data
      5m 42s
    4. Finding and replacing data
      6m 4s
  7. 17m 51s
    1. Exploring the Page Layout tab and view
      7m 20s
    2. Previewing page breaks
      4m 56s
    3. Working with Page Setup and printing controls
      5m 35s
  8. 30m 30s
    1. Creating charts
      4m 36s
    2. Exploring chart types
      7m 47s
    3. Formatting charts
      5m 42s
    4. Working with axes, labels, gridlines, and other chart elements
      5m 35s
    5. Creating in-cell charts with sparklines
      6m 50s
  9. 12m 49s
    1. Freezing and unfreezing panes
      2m 39s
    2. Splitting screens horizontally and vertically
      4m 48s
    3. Showing necessary information with the Outlining feature
      5m 22s
  10. 23m 0s
    1. Displaying multiple worksheets and workbooks
      4m 17s
    2. Renaming, inserting, and deleting sheets
      2m 23s
    3. Moving, copying, and grouping sheets
      3m 39s
    4. Using formulas to link worksheets and workbooks
      6m 1s
    5. Locating and maintaining links
      6m 40s
  11. 20m 25s
    1. Using IF functions and relational operators
      3m 43s
    2. Getting approximate table data with the VLOOKUP function
      7m 6s
    3. Getting exact table data with the VLOOKUP function
      4m 42s
    4. Using the COUNTIF family of functions
      4m 54s
  12. 23m 50s
    1. Unlocking cells and protecting worksheets
      7m 50s
    2. Protecting workbooks
      2m 40s
    3. Assigning passwords to workbooks
      4m 41s
    4. Sharing workbooks
      4m 7s
    5. Tracking changes
      4m 32s
  13. 28m 32s
    1. Sorting data
      6m 9s
    2. Inserting subtotals in a sorted list
      8m 25s
    3. Using filters
      6m 16s
    4. Splitting data into multiple columns
      5m 4s
    5. Removing duplicate records
      2m 38s
  14. 35m 2s
    1. Creating PivotTables
      8m 36s
    2. Manipulating PivotTable data
      9m 47s
    3. Grouping by date and time
      6m 0s
    4. Grouping by other factors
      2m 33s
    5. Using slicers to clarify and manipulate fields
      4m 7s
    6. Using PivotCharts
      3m 59s
  15. 23m 29s
    1. Using Goal Seek
      6m 8s
    2. Using Solver
      6m 34s
    3. Using Scenario Manager
      6m 11s
    4. Using Data Tables
      4m 36s
  16. 24m 31s
    1. Definition and examples
      6m 48s
    2. Creating a simple macro
      7m 0s
    3. Running a macro
      10m 43s
  17. 29s
    1. Next steps
      29s

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