She must also begin saving a small amount each month to cover any unforeseen emergency that might push her back into debt.īefore attempting to solve any problem with Solver, make sure it has been installed on the system. I then proposed the following problem to the class: What if Amy wants to get out of debt? To do so, she must first stop spending more than she earns by either eliminating or reducing some of her monthly expenses. This worksheet posed the problem of adjusting expenses to eliminate debt.įrom this worksheet, the students could see that even though Amy is earning what seems to be a fair amount of money ($30,000 a year), she is definitely running herself into serious debt. I presented them with a worksheet that looked something like this: Once the students demonstrated they could perform a what-if analysis with the template, it was time to introduce them to Solver. I insisted they not give up until they got the exact figure, because I knew that after struggling through the problem manually, they would be ready to have Solver do it for them. Some students found that trying to work out the budget manually by plugging in different numbers was just too tedious a task and asked if they would still get credit if they at least came close to $300, such as $275 or $325. Then, they were to adjust those values to answer the question “What if I wanted to save 5 percent of what I earn each quarter?” Or “How can I get G21 to equal 5 percent of $6,000 (or $300)?”Īfter working with the template, the students quickly learned that in order to meet the savings requirement, they had to play extensively with the numbers. Their assignment was to fill in what they considered would be typical values for each of the expense categories. I suggested they all start out with a monthly salary of $2,000. Students began the exercise with a personal budget worksheet. Before introducing Solver, I had them first work with a template they could use to develop a personal budget, similar to the one below. So instead of using corporate budgets to teach Solver, I decided to work with something closer to the student’s own experience-making and spending money.
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Hence, they found it difficult to understand exactly what was being asked for in the corporate budgeting problem, let alone how to solve it with Solver. Most students in my classes had little or no background in financial accounting.
However, after working with this type of exercise a number of times with my students, I’ve found that while most were able to get through it fairly well, they had no idea how Solver arrived at the results, much less how to apply the tool to their own problems. Typically, students are guided through a step-by-step exercise demonstrating how Solver can be used to make corporate budgeting decisions.
Many Excel courses use Solver to introduce beginning students to using what-if analysis in decision making. When it comes to solving problems where any number of variables can affect the outcome, Excel’s Solver tool can help you find the answer. Learn how to use a personal budget to teach the Solver feature in Excel. But sometimes, students can learn more from everyday examples, such as creating a household budget. Textbook examples often use business concepts to illustrate a tool or function. Balancing personal budgets can help students learn Excel’s Solver