Goal-seeking function

[zchmielewska]

The feature has been suggested by kyworkact.

I think if a goal seek function is available similar to what excel has, it would be very useful e.g. for generating premium rate in meeting certain profit target.

[zchmielewska]

Hi @kyworkact,

You previously mentioned a goal seek function similar to Excel's functionality, and I've prepared a simple example to show how it can be repliacted in Python.

Scenario: We have a 3-year term policy with a net premium of 100, and we want to find a profit margin that results in a present value of premiums equal to 3000, assuming a discount factor of 0.98.

Excel

In Excel's Solver, we would follow these steps:

1. Setting up the problem:

2. Solution found:

The profit margin that meets the criteria is 13.97%.

Python

In Python, we can achieve the same result using the scipy package. Here's the equivalent solution:

from scipy.optimize import root

DISCOUNT_FACTOR = 0.98

def premium(profit_margin):
    return 100 * (1 + profit_margin)

def pv_premium(t, profit_margin):
    if t == 36:
        return premium(profit_margin)
    return premium(profit_margin) + pv_premium(t+1, profit_margin) * DISCOUNT_FACTOR

def eqn(profit_margin):
    return pv_premium(0, profit_margin) - 3_000

myroot = root(eqn, 0)
print(myroot.x)  # Output: [0.13970692]

Does this solve your problem? If not then please feel free to share your specific problem. I'd be happy to help!

[ghost]

Thank you so much for sharing! I am still working on it, will let you know if I need further help. Thanks a lot again!

[ghost]

Hi, just want to let you know that I wasn't able to use root for what I wanted to do, but eventually did something similar to bisection to do the goal seeking. It's working alright now. Thanks a lot again for your help!