What-If Analysis

· Excel provides a number of tools to help you find answers to "What-If" type questions. What-If Analysis allows you
effect that input value changes have on the result of the formulas. For example, what happens to a car loan payment if you
down payment or increased the interest rate?

· Excel provides the following What-If Analysis tools:

Goal Seek: Allows you to find the correct input to produce the desired outcome. Simple to use, but limited in power and fl

Data Tables: Allows you to see how the results are affected by changes in the input values displayed in a table. Simple to
limited in power and flexibility.

Scenario Manager: Allows you to create, manipulate, and save a number of different scenarios that use different input var
producing different results. Simple to use, but limited in power and flexibility.

Solver: Allows you to find the best solution to complex problems that revolve around the manipulation of multiple variable
constraints. More difficult to use, but very powerful and extremely flexible.
Car Loan Analysis Payments
Car Purchase Price 25,000 533.87
Less Down Payment 1,000
Car Loan Amount 24,000
Interest Rate 12%
Term (months) 60

In this example, you will use a data table to calculate monthly car payments based on the amount of the d
List the following substitution values for the down payment in cell range C3:C6: 1500, 2000, 2500, and 30
Select a cell range that includes the formula and all the substitution values. C2:D6
From the main menu, choose, Data > What If Analysis > Data Table
In the Column input cell, enter B3.
Click OK to create the one-variable Data Table
n the amount of the down payment.
0, 2000, 2500, and 3000
 Personal Loan

Amount of loan $60,482

8.50%
Interest Rate 9.25% 8.97%
9.00%
Term of Loan (Years) 5 9.25%
9.35%
Number of Payments (per Year) 12 11.50%
12.00%
Amount of Payment $1,262.86 12.50%
13.15%
Total Paid $75,771.48 13.55%
Interest Paid $15,289.48
To be Repaid by March 2029

In this example, you will calculate the monthly repayment, total repayment and total interest based on inte
In cell E3 type in =B11
In cell F3 type in =B13
In cell G3 type in =B14
Highlight D3:G9
Click Data > Table > What If Analysis
In Column Input Cell, type in B5
Click OK
 Monthly Repayment Total Repayment Total Interest

d total interest based on interest rate.

Car Loan Analysis Monthly Payment
Car Purchase Price 55,000 $ 976.08
Less Down Payment 2,000
Car Loan Amount 53,000
Interest Rate 4%
Term (months) 60

In this example, you will determine the monthly payment based on down payment and interest rate.
List the following substitution values for the down payment in cell range C3:C6: 2500, 3000, 4000, 5000
List the following substitution values for Interest Rate in cell range D2:G2: 5, 6, 7, 8
Select cell range C2:G6
From the main menu, choose, Data > What If Analysis > Data Table
In the Row input cell, enter B5.
In the Column input cell, enter B3
Click OK
wn payment and interest rate.
e C3:C6: 2500, 3000, 4000, 5000
:G2: 5, 6, 7, 8
 Personal Loan

Amount of loan $30,000

7.50%
Interest Rate 8.97% 7.97%
8.50%
Term of Loan (Years) 10 8.97%
9.50%
Number of Payments (per Year) 12 9.57%

Amount of Payment $379.54

Total Paid $45,544.85

Interest Paid $15,544.85
To be Repaid by $49,032.00

In this example, you will calculate payment based on interest rate and term of loan.
Click in D3 and enter =B11 (Loan Repayment Amount)
Highlight D3:H9
Go to Data > What If Analysis > Data Table
Make your Row input cell B7 (Term of Loan)
Make your Column input cell B5 (Interest Rate)
Click OK
 Term of Loan
10 12 14 16

m of loan.
Down payment required 500
Trade-in value of old car 4,000
Price of car you can afford 22,500

In this example, you will use the Goal Seek to determine down payment based on price of car
Click on cell B3.
On the ribbon, select Data > What If Analysis > Goal Seek to display the Goal Seek dialog box. B3 will appear in the
In the To value text box, enter 30000.
In the By changing cell text box, enter B1
Click OK.
The Goal Seek Status dialog box should appear, and the solution of $2,000 appears in cell B1
Click OK to accept the changes.
og box. B3 will appear in the Set cell text box.
 Costs for this Expected % Estimated
year increase cost for next
year

Rent 30,000.00 10 33,000.00

Staff 95,000.00 10 104,500.00
Energy 20,000.00 20 24,000.00
Other 55,000.00 5 57,750.00
Total 200,000.00 219,250.00

In this example, you will create a scenario displaying low inflation and a scenario displaying high inflation

Select cell range C2:C5.

Select Data > What If > Scenario Manager to display the Scenario Manager dialog box.
Click Add to display the Add Scenario dialog box
In the Scenario name text box, enter Low Inflation

Click OK to display the Scenario Values dialog box.

Change the value in text box 1 to 1, change the value in text box 2 to 2.5, change the value in text box 3 to 10, and

Click Add to display a new Add Scenario dialog box.

In the Scenario name text box, enter High Inflation

Click OK to display the Scenario Values dialog box.

Change the value in text box 1 to 12, change the value in text box 2 to 15, change the value in text box 3 to 35, and

Click OK to add the scenario and return to the Scenario Manager dialog box.
From the Scenarios list box, select Low Inflation.
Click Show
From the Scenarios list box, select High Inflation.
ng high inflation

e in text box 3 to 10, and change the value in text box 4 to 2

e in text box 3 to 35, and change the value in text box 4 to 8

 The New Car Fleet

Class of Car Cost per Car # of Cars Cost

Small 14,000 1 14,000
Medium 20,000 1 20,000
Large 40,000 1 40,000

Total cost of the car fleet 74,000

Select the Target Cell, cell D8.

From the main menu, choose Data > Solver to display the Solver Parameters dialog box:

In the Equal To area, select the Value of radio button and enter 500000 in the text box to set the budget.
In the By Changing Cells area, select cell range C4:C6

In the Subject to the Constraints area, click on the Add button to display the Add Constraint dialog box.
Add the following constraint: D8<=500000

Click Add to add the following constraint (This constraint forces Excel to solve for whole numbers since we cannot buy part of
C4:C6 int integer

Click Add to add the following constraint (This constraint makes sure that your fleet will have at least 4 small cars):
C4>=4

Click Add to add the following constraint (This constraint makes sure that your fleet will have at least 3 medium cars):
C5>=3

Add the following constraint (This constraint makes sure that your fleet will have at least 2 large cars):
C6>=2

Click OK.
Click Solve.
From the Solver Results dialog box, select the Keep Solver Solution radio button, and click OK.
set the budget.

raint dialog box.

umbers since we cannot buy part of a car):

ve at least 4 small cars):

ve at least 3 medium cars):