# PMP formulas you have to know

When taking the PMP exam, you can expect to answer different types of questions: formula-based questions, situation-based questions, definition-based questions, ITTO-based questions, interpretational questions and PMP ethics questions.

Different types of questions need a different approach. For me personally, it's easier to calculate, and formula-based questions were my favorite during the preparation for the exam. I made a list of all formulas used in project management and learned them by heart. I will share this list and also, I will show you my cheat sheet of the formulas that I actually used during the exam.

Formula | Definition | Abbreviations | Note |
---|---|---|---|

PV = Planned % Complete * BAC | What the project should be worth | PV - planned value BAC - budget at completion | |

EV = Actual % Complete * BAC | What the project is worth | EV - earned value BAC - budget at completion | |

SD = (P - O) / 6 | SD measures the Variation from Average | SD - standard deviation P - pessimistic estimate O - optimistic estimate | |

EAD = (O + 4R + P) / 6 | EAD calculated by beta distribution | EAD - estimated activity duration R - realistic estimate P - pessimistic estimate O - optimistic estimate | |

EAD = (O + R + P) / 3 | EAD calculated by triangular distribution | EAD - estimated activity duration R - realistic estimate P - pessimistic estimate O - optimistic estimate | |

CV = EV - AC | CV represents the amount of budget deficit or surplus at a given point in time | CV - cost variance EV - earned value AC - actual cost | |

SV = EV - PV | SV aims to measure schedule performance through the difference between the earned value and the planned value | SV - schedule variance EV - earned value PV - planned value | |

CPI = EV / AC | CPI measures the cost efficiency of budgeted resources | CPI - cost performance index EV - earned value AC - actual cost | |

SPI = EV / PV | SPI measures schedule efficiency | SPI - schedule performance index EV - earned value PV - planned value | |

ETC = EAC - AC | ETC predicts how much more the remainder of the project will cost | ETC - estimate to complete EAC - estimate at completion AC - actual cost | |

EAC = BAC / CPI | Predicts final project costs based on current performance | EAC - estimate at completion BAC - budget at completion CPI - cost performance index | |

EAC = AC + BAC - EV | Predicts final project costs based on current performance | EAC - estimate at completion BAC - budget at completion AC - actual cost EV - earned value | |

EAC = AC + [(BAC - EV) / (CPI * SPI)] | Predicts final project costs based on current performance | EAC - estimate at completion BAC - budget at completion AC - actual cost EV - earned value CPI - cost performance index SPI - schedule performance index | |

VAC = BAC - EAC | VAC is a projection of the amount of budget deficit or surplus | VAC - variance at completion BAC - budget at completion EAC - estimate at completion | |

TCPI = (BAC - EV) / (BAC - AC) | Predicts likelihood of reaching BAC | TCPI - to-complete performance index BAC - budget at completion EV - earned value AC - actual cost | |

TCPI = (BAC - EV) / (EAC - AC) | Predicts likelihood of reaching EAC | TCPI - to-complete performance index BAC - budget at completion EV - earned value AC - actual cost EAC - estimate at completion | |

N * (N - 1) / 2 | Number of communication channels | N - number of team members | |

Slack = LS - ES | Date constraints, within which we can plan our activity without affecting the overall length of the project | LS - late start ES - early start | |

Slack = LF - EF | Date constraints, within which we can plan our activity without affecting the overall length of the project | LF - late finish EF - early finish | |

EF = ES + Duration - 1 | The earliest you can finish the activity without delaying the project end date | EF - early finish ES - early start | |

LS = LF - Duration + 1 | The latest you can start the activity without delaying the project end date | LS - late start LF - late finish | |

EMV = Probability * Impact | EMV represents the expected money to be made from a specific decision | EMV - expected monetary value | |

ROI = (Net Profit / COI) * 100 | Measures profit or loss gained through an investment based on the amount invested | ROI - return on investment COI - cost of investment | |

CBR = NPV / initial investment cost | CBR tells about the profit to be received from an investment | CBR - cost-benefit ratio NPV - net present value | |

NPV = Value / (1 + r) ^ t | Net present value of investment | Value - value of benefits r - rate of discount t - defined time frame |

This is the most complete list of formulas I could make for myself. I knew all of them and I definitely recommend you learning them all without exception. However, some of them are used more often than others.

On the PMP exam, it's highly effective to write a cheat sheet as soon as the exam starts. It's a concise set of notes used for quick reference. In my cheat sheet I included the most commonly used formulas. From my personal experience, all the formulas that I needed on the exam were on this list. But this is only my experience and you never know what sorts of questions you will have and what formulas you will have to use. That's why, even though most probably you will use the formulas mentioned in my cheat sheet, you should not limit yourself to only them, but learn all the formulas used in project management.

## PMP Formulas Cheat Sheet

- CV = EV - AC
- SV = EV - PV
- EAC = BAC / CPI
- VAC = BAC - EAC
- CPI = EV / AC
- SPI = EV / PV
- ETC = EAC - AC
- TCPI = (BAC - EV) / (BAC - AC)
- PV = Planned % Complete * BAC
- EV = Actual % Complete * BAC