Chapter 33. Using Solver for financial planning
Questions answered in this chapter:
Can I use Solver to verify the accuracy of the Excel PMT function or to determine mortgage payments for a variable interest rate?
Can I use Solver to determine how much money I need to save for retirement?
Solver can be a powerful tool for analyzing financial planning problems. In many of these types of problems, a quantity such as the unpaid balance on a loan or the amount of money needed for retirement changes over time. For example, consider a situation in which you borrow money. Because only the noninterest portion of each monthly payment reduces the unpaid loan balance, you know that the following equation (Equation 1) is true:
(Unpaid loan balance at end of period ...