- In excel the value of pmt can be found through excel’s built-in formulae. Pmt is generated thorough a formula builder. While applying the formula for pmt we need to go to ‘insert function’ then searching through financial and then pmt, which calculates the payment for a stream given in the question. Initially, we found pmt1 for inflows and then pmt 2 for outflow through future value. Taking these values as cash flows for pmt1 we generate the value for pmt. (see excel spreadsheet).
- Excel solver is helpful to find risks, returns and other financial solutions for single variable. In our case if we had to generate multiple variables this cannot be done through excel spreadsheet and therefore we use crystal ball solver. For a newly started business excel is the best tool for forecasting, optimization and what-if scenario analysis.