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Use this Excel tool to solve complex personal finance calculations

MS Excel's Solver is an optimisation tool that aims to calculate the value of a variable while incorporating changes in the multiple variables of a financial equation. This also includes any user-defined constraints or conditions.

By Sameer Bhardwaj, ET Bureau |Updated: June 22, 2020, 06.06AM IST
Most of the calculations in personal finance are based on the present and future values. These concepts are applied for working out numbers in retirement planning, loan calculations, returns and evaluating investment projects. The formulas for the present and future values are straightforward and can be applied using a scientific calculator or an Excel spreadsheet. However, the computations get
number of years can be determined by looking at the average life expectancy. The other area where Solver appears very effective is the portfolio optimisation, which determines the optimum weights of assets in a portfolio. Such optimum weights are subject to conditions like maximum return at a given level of risk or minimum risk at a given level of return.

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