Yes, Mrs. Damiano, you were right … I do use Algebra every day. Mrs. Damiano was my High School Algebra teacher. In my defense she also said that I would use Trigonometry every day and I haven’t use Trig since I took the GMAT.
If you don’t use Algebra every day, you are in luck. Excel has a tool called “Goal Seek” that eliminates the need for Algebra for quick calculations. For example, Goal Seek makes it easy to compare compensation between two jobs.
In the example, below, the current job pays $50K salary, with a 10% bonus. The job also has an excellent benefits program that only costs $240 per year. Another job pays $52K salary, with a 5% bonus, and similar benefits will cost $2100 per year.
How does the current job compare to the new job? A quick calculation shows that the current job’s target compensation is $55,000 and the new job’s comparable compensation is $52,740.
What would the Base Salary on the New Job need to be to equal a Comparable Compensation of $55,000?
This is where the Goal Seek function comes in handy. On the menu, select - Tools> Goal Seek
- “Set cell” is the cell that we want to equal $55,000 Comparable Compensation
- “To value” equals $55,000
- “By changing cell” is the value that you are solving for (here we want to know the Base Salary that will give us a $55,000 Comparable Compensation)
Click “OK” and Excel changes the Base Salary to $54,152 to equal a Comparable Compensation of $55,000
To solve for a Comparable Salary of $57,000, just change the “To value” to 57,000.
Click “OK” and Excel changes the Base Salary to $56,057 to equal a Comparable Compensation of $57,000.
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