Continuing with our Excel Tutorials, in this article, I’ll take you through using Goal Seek in Microsoft Excel 2007. The function is same as that of earlier versions of Excel as well as Excel 2010. The screenshots below are taken in 2007.
Three weeks back I covered creating Single Variable Data Tables in Excel. As promised, in this tutorial I will cover creating a two variable data table. This tutorial assumes that you have read the earlier one and are comfortable with creating a single variable data table.
In my last Excel Tutorial, I covered using SUMIFS and SUMPRODUCT.
Data Tables is also an advanced topic in Microsoft Excel that falls under the category of What-If Analysis. What-If or Sensitivity Analysis is carried out to study the variation of the output to changes in the input variable.
Consider a case of compound interest, where you invest a certain amount of money in a bank deposit and the amount is compounded every year.
Formula for calculating compound interest:
A = P * (1 + r/n) ^ nt
- P = principal amount (initial investment)
- r = annual interest rate (as a decimal)
- n = number of times the interest is compounded per year
- t = number of years
- A = amount after time t
Now, if suppose we want to see what the final amount will be at different interests rates, we can quickly use a data table for the same.