This post is part of spreadcheats series.
Today we will learn a fascinating little feature in excel called “goal seek”.
But what good is a feature if we cant find a use for it? So we will build a simple retirement calculator using excel.
Before plunging in to the complex retirement calculations, let us spend a bunch of words understanding what this goal seek is all about.
What is goal seek in excel?
We can think of goal seek as opposite of formulas. Formulas tell you what is the output of a bunch of variables used in an equation (for eg. sumproduct is an equation involving + and *). Goal seek tells you what inputs you need to give in order to get certain output.
For example, you can use goal seek to solve a linear equation or find the internal return rate (IRR) of an investment.
Now that you understand goal seek, let us plan your retirement. 🙂
Make a financial model to estimate your monthly savings to meet retirement goals.
(Note: the image shows commas according to Indian currency formatting.)
In order to proceed, we would need some data, like,
(1) What is your current age?
(2) What is your expected retirement age?
(3) How much do you think you will spend every month when you retire (of course in today’s prices)
(4) Your expectation of inflation (%)?
(5) Your expected return (%) on investments?
Once the data is available, we will need to calculate the following,
I have shown the worksheet on the right with some dummy data.
(6) The yearly expenses at the time of retirement: (3) * (1+(4))^((2)-(1))*12
(7) Corpus required to generate the above amount every year (and leave the principle behind): (6)/(5)
(If these calculations are overwhelming, download the excel retirement calculator workbook here.)
We know how much corpus is needed.
We can use FV() formula to determine the future value of a series of payments made periodically and compounded at a given interest rate.
We know how much the FV() out come should be, but we don’t know how much the input (monthly investment) should be.
This is where goal seek is going to help us.
Let us assume the monthly investment amount will be in cell A5. Let us also assume, the interest rate is in cell A4, retirement age is in A3, current age is in A2.
We will write the FV formula in cell A6 like this = -FV(A4/12,(A3-A2)*12,A5)
(we have to negate FV since it uses weird accounting notations)
Since the cell A5 is blank, the FV will show the value as 0.
Now, we will use goal seek to find out how much cell A5 should have so that A6 will be calculated to the corpus amount required.
Go to Data tab and click on What if analysis and select goal seek. (In excel 2003, it should be in tools menu)
See this screen cast to understand how the goal seek works:
The goal seek window has 3 inputs. The cell you need to change. The cell you want to set and the value to set.
Once you use the goal seek it will find the correct (or closest) value to meet the goal and displays it. If you press OK, the value will be placed in the cell (in our case, in A5)
That is all.
Download the Retirement Calculator Excel Worksheet and play with it
Click here to download the retirement calculator worksheet. Follow the instructions in the workbook to see this example for yourself. Change values to find the amount that you need to save.
Do you find goal seek feature useful?
What do you do with excel goal seek? Do you use it in your modeling, planning worksheets? Tell me your experiences and ideas using comments.
Additional resources:
- Read remaining posts in Spreadcheats series: Become a spreadsheet guru by learning these nifty hacks.
- Excel financial formulas – Help on NPV, FV, PV and more
- Understand why you should start early when it comes to retirement savings
- Buy or rent calculator in Excel – calculate returns on property investments
PS: the retirement calculation steps are derived from this excellent article on smart investor
39 Responses to “11 very useful excel keyboard shortcuts you may not know”
You asked about a favorite keyboard shortcut: I often right click the navigation arrows at the bottom of an Excel workbook to get a list of the worksheets. I can click the one I want without having to scroll left or right.
I regularly use the networkdays(x,y,z) function to show the number of working days between two given dates. To exclude public holidays I reference a list of dates ("z" in the above reference) which I periodically update to reflect upcoming non-working days. To keep the sheet looking tidy for other users, I like to hide this column when I'm done, and then unhide it when I update the sheet.
With 40 separate workbooks to edit, these shortcuts make it a breeze...
? Hide selected column: CTRL+0 [zero]
? Unhide hidden column(s) within selection: CTRL+SHIFT+) [closed parenthesis]
If an "Autofit Selection" keyboard shortcut (not just a key sequence) existed, I'd be as happy as a clam!
you can use Alt+o+c+a to autofit selection
Is there a way to auto arrange the column width as you enter the data. Without a macro
You may use alternative key of hide the selected cell by ---print + H key
Unhide---prnt+U keys
You may use alternative key of hide the selected cell by ---print + H key
Unhide---prnt+U keys
[...] 11 very useful excel keyboard shortcuts you may not know [...]
[...] 11 very useful excel keyboard shortcuts [...]
[...] an Excel Conditional Formatting Rock Star 11 very useful excel keyboard shortcuts 73 Free Designer Quality Excel Chart Templates Tracking mutual fund / Stock portfolios using Excel [...]
Hello Chandoo, thanks for sharing this information. With some of the shortcuts I seem to have difficulties as they do not seem to work on the German keyboard.
Can you maybe verify that those combos are only working with the keyboard setup you are using? What would be a good source to lookup combinations for other layouts?
Regards, 1xoid1
@1xoid1 ... Thanks for visiting PHD and taking timeout to ask your question. Unfortunately all my German can be summarized to one phrase: "guten tag".
I wont be able to help you, but I can request other readers to respond. So if you know German or use German keyboard and can answer 1xoid1's question, then you get a free donut.
Guten Tag 🙂
To Sam Krysiak.
Shortcut to Autofit Selection (assuming you mean autofit columns). If you right click toolbar, click customise. From Commands tab/Categories select Built-in Menus.
In Categories window scroll down and select Columns and drag drop it onto toolbar. Then click the new toolbar Columns button and drag drop Autofit button onto your toolbar (note Autofit for Columns will no longer appear in your menus, only on toolbar).
Remove Columns button from toolbar (if you want to keep clutter down) drag and drop it off of your toolbar.
Close Customise box.
Now to Autofit columns just press "Alt" then "A".
Comment 8 correction - 2nd paragraph should read
"In Commands window...
@1xoid1:
Read the following text as follows: The key ,[;] is the one right to the M on the German keyboard. Here are the differences you have to know when using a German keyboard:
2. Press strg .[:] for inserting the current date (and strg shift .[:] for inserting current time)
3. Press strg ,[;] to copy values from cell above
8. Press strg shift –[_] to apply an outline border
10. Press strg-shift S to activate the font drop down (Schriftgroesse)
11. Press strg-shift G to activate the font size (Groesse)
Number 10 and 11 do not work with Excel 2007 anymore, but strg-shift-P shows the font tab of the cell format dialogue in Excel 2007.
All other shortcuts should work on a German keyboard exactly as Chandoo described them.
More information needed? Download a complete list with all shortcuts for Microsoft Excel in German (for free):
http://www.freeware-download.com/downloaddetails/5655.html
@Chandoo: please do not send a donut, unless you are able to attach one to an email. Otherwise the donut might be able to walk by itself, when it arrives here in Germany...
I forgot to mention:
For all readers using an English keyboard: Chip Pearson offers a comprehensive list of Excel shortcuts on the English keyboard:
http://www.cpearson.com/excel/ShortCuts.aspx
[...] your own keyboard shortcuts in Excel 2007, knowing a few keyboard shortcuts in excel is a huge help. Lyte Byte describes a nifty way to create your own key board shortcuts in [...]
[...] Select a bunch of cells and click on the Sigma symbol on the standard tool bar. Alternatively you can use Alt+= keyboard shortcut. [...]
I do some data entries column A,column B ,Column C , A and B have 10 to 12 digit codes , C has the names ; Kindly suggest me a format or formula for excel to avoid duplication of entries in all the the three columns.
Regards,
Prashant
@Prashant... You can use conditional formatting to highlight duplicate entries in the three columns. That way whenever you type a dupe value in a cell the formatting would highlight the values so that you can avoid the error.
check this post for more on using this way to handling duplicates: http://chandoo.org/wp/2008/03/13/want-to-be-an-excel-conditional-formatting-rock-star-read-this/
If you are looking for a way to remove duplicates from an existing range, you can try one of the various techniques we have described here. Try these tips:
http://chandoo.org/wp/2008/11/06/unique-duplicate-missing-items-excel-help/
http://chandoo.org/wp/2008/08/01/15-fun-things-with-excel/
[...] good alternative (although manual) is to use keyboard shortcuts CTRL + ; or CTRL + : to insert current date and time in the active cell. Since this places the [...]
Your site doesn't correctly work in safari browser
Hi GesyimmeliA: Can you tell me which version of Safari on which OS has this problem. I use Macbook at home and loaded the site quite often in Safari and never seen any layout or content issues. Are you facing any script issues while posting comments or somethings like that ?
Hey Chandoo. Great site. Learning lots.
My favorite Excel shortcut has got to be Alt+Down when over an autofilter drop down. Learning that changed my life. That was one of the last things I needed to use a mouse for. Changed my life.
[...] are a big advocate of keyboard shortcuts. I think learning a handful of keyboard shortcuts can improve your productivity tremendously, [...]
My favourit keyboard shortcut is control and 1 (use the 1 above the letters on the keyboard, not the number pad) for format cells.
Favourite shortcut: alt + shift + right/left arrow for grouping/ungrouping!
[...] Select a bunch of cells and click on the Sigma symbol on the standard tool bar. Alternatively you can use Alt+= keyboard shortcut. [...]
[...] clicking on these: excel keyboard shortcuts, excel mouse tips & tricks, excel productivity tips part 1 & part [...]
Martin Williamson thanks for the autofit tip! You rock.
In order to generate charts/bar graph with a single key:
1. Select the data
2. Press F11
3. Magic.... 🙂
F3 = Paste a Name or the entire list of Names
Crtl + F3 = Name Manager
Crtl + : = Inserts current time.
F12 = Save As
Mistake!
Crtl + Shift + : = Inserts current time.
SIR U R THE BEST PERSON WHO SHARES A WONDERFULL AND IMPORTANT TIPS IN EXCEL. THANKS AND KEEP ROCKING.
How do i hide / unhide a work sheet using the keyboard.
Great!
Other useful excel shortcuts
http://webtutorialplus.blogspot.com/2012/01/excel-quick-tip-useful-encoding-hotkeys.html
input in one cell 1a23bc output in two cell one of 123 and other one is abc how to possible, please help me.
Hey cool shortcuts but excel have more shortcuts then you listet.
i find a big database of supportet shortcuts for Excel 2007 here
http://www.veodin.com/excel-2007-shortcuts/
[...] INTEREST Date with my sheet – 10 tips on using date / time in excel http://chandoo.org/wp/2008/07/29/excel-keyboard-shortcuts/ [...]
Great article with some very useful follow-up comments and tips.
One simple question … how do you vertically align the drop-down filter button in a cell with a larger than normal height?
It’s easy enough to do so with a cell’s contents but the drop-down filter button stubbornly remains at the bottom and I need it at the top!
I’ve looked everywhere and haven’t located an explanation to what I am sure is considered an Excel basic.
Cheers