3rd EDIT: SEE POST 6 BELOW FOR SHEET.
2ND EDIT: Ok, I got somewhat of an answer by learning how to use Goal Seek. Not sure this will suffice because, using Goal Seek, I guess you have to run it manually each time to use it. If there is a "formula" for J2 so that it will be dynamic -- changing as the spreadsheet's other parameters change -- please advise. Thanks.
=
I have a sheet such that...
Col I is a column where as you go down by a cell (1 year's time), each year, the balance grows by earning interest (such as you could earn with CD's, bonds or stock market dividends or growth). The interest rate applied is in cell J2.
The bottom cell in Col I, the series of balances by year, is I26.
Col AA is a column that takes the first year's balance and then applies an inflation factor, say, 3%... 3% inflation per year. As you go down Col AA, each year, the balance grows by that inflation -- 3% in this instance. The last cell in the column is AA26.
I am hoping for a formula for J2. I want to determine the interest rate (which, as I said, is in cell J2) necessary such that I26 is equal to AA26. Thus, I would be solving for "what is the interest rate I need to earn each year so that my portfolio keeps up with an inflation of 3%?" Cell J2 will equate to the interest rate necessary to make I26 and AA26 equal.
It's a bit more complicated than that (there are other factors); I have simplified it to ask this question. If I get an answer, I think I can make it work.
Is this a pretty simple formula or do I have to use a Solver. I do not have much experience with Solver and really don't know how to use it. Obviously, not too great on formulas either, lol. Thanks.
(Excel 2010)
EDIT: Hmmm... found something on Goal Seek; will have to read up on this.
Bookmarks