How to Memorize PMP Exam Formulas in Under 10 mins

Hello and welcome. In this training, we are going to cover how you can memorize the formulas that you need to know for your upcoming PMP or Project Management Professional or CAPM exams in less than 10 minutes. I'm going to give you a super cool trick, so be sure to stick with us until the end. So most of the formulas that you are going to see will center around EVM or Earned Value Management. So let's first begin by covering some of the terminology that you need to know, and then we're going to dive right into the formulas. So the first terminology that you need to know is PV, or planned value. PV is the percentage complete of where the project should be. Before you begin your project, you should be planning out your budget as well as your schedule, so this is going to tell you at any point in time in your project how much you have planned to spend and how much you planned to progress on your project. This is what your planned value is. The next terminology that we will take a look at is earned value, or EV. The way that you calculate the EV is you use the percentage complete, so how much work you have actually done on the project, and you multiply this by your budget at completion. So what the earned value is telling you is what is the value of the work that you have actually accomplished on on your project. Let's take a simple example. Let's say that our project is to paint a 4-sided fence, and let's say that we will get paid $1,000 by our client once we finish the project. This means that each of the sides of the fence is worth $250 to us. Let's say that we have a percentage complete of 25%, so we finish one side of the fence, and then we multiply this by our budget completion, which is $1,000. The earned value here, so but the work that we have actually completed here is worth $250 to us. Now, if our actual cost is more than $250, that means that we're over budget, and if we're under $250, that means we made a profit from the work that we've done. Now, I'm skipping a bit ahead of myself, so let's get back on track. So let's take a look at the first formula in EVM, or Earned Value Management, and this is cost variance, which is also known as CV. The cost variance is computed by using the earned value subtracted by the actual cost. So the earned value again is what is the total value of the work that you have done so far, and then you subtract that by what you have actually spent in order to earn the work that you have already done. So the CV, the cost variance, will tell you whether you're over budget or or under budget. If the cost variance is a positive number, that is good. If the cost variance is a negative number, that is bad. Similarly, the next formula is the schedule variance or SV. We compute the schedule variance by using the earned value and then we subtract the planned value. So the schedule variance will tell us whether we are ahead of schedule or behind schedule. If the If the schedule variance is a positive number, that means that we're ahead of schedule, which is good. And if the schedule variance is a negative number, then that means that we're behind schedule, which is bad. If it's 0, that means that we're right on target. Now, what you have seen is that whenever there is a variance of schedule variance or cost variance, remember to use subtract. The next formula we will take a look at is the cost performance index. This is kind of similar to the cost variance except it's putting the numbers in a percentage. So the reason you want to do this is like if you have a large portfolio of projects that you want to manage and these projects are different sizes, if you just use the cost variance, you can't compare apples to apples. So one project may have a cost variance of -$1,000, another project may have a cost variance of +$1 million, and because these 2 projects are on different scales, skills, but they're all under your portfolio. What you want to do in this case is compute the Cost Performance Index so it allows you to understand how much you are over or under budget in a percentage format so you can compare different projects of different sizes across your portfolio. The way that you compute your CPI is you use the earned value and you divide the actual cost. So it's very similar to the cost variance except instead of subtracting here, you're dividing. And if the CPI is greater than 1, then that is good, and if the CPI is less than 1, then that is bad. The next formula we will take a look at is the Schedule Performance Index, which is very similar to the Cost Performance Index. The way that you compute the SPI is you use the earned value And you divide by the planned value. And this will tell you whether or not you're ahead of schedule or you're behind schedule. If the SPI is greater than 1, then that is good. If the SPI is less than 1, then that is bad. Now, what I want you to notice here is that whenever you have INDEX, you're dividing, and then whenever you have VARIANCE, you're subtracting. The first value of all of the 4 formulas we looked so far looked at so far begins with the Earned Value, and if you're trying to calculate the schedule, then the second value is the Planned Value. If you're trying to calculate anything related to cost, then the second value is the Actual Cost. Our next formula is our Estimate at Complete, or EAC. There are actually 5 different ways that we can calculate our EAC. I'll link the video below where we cover all of the different ways. We're just going to cover one of them here. Now remember that the 5 ways to calculate EAC are actually not equal, to each other, the method that you would use would depend upon the interpretation of the question. One of the common ways that you can use to calculate the EAC is to use your budget at completion and you divide that by your cost performance index. What you're assuming in this case is that the future work that you have remaining on your project will move at the same rate as your cost performance index. Let's say that your cost performance index is 0.8, so that means that you are currently behind budget, so you're over budget right now, and that the future work would also be behind budget by the same rate as the current work. So if that is the case, then what you do is you want to adjust how much budget you have remaining, and the way that you do that, the way that you calculate the new Estimate at Complete, is you use your original budget and and you divide that by the Cost Performance Index. Our next formula is Estimate to Complete, or ETC. The way that we calculate our ETC is we use our Estimate at Completion, so this is how much we estimate that we will be spending at the end of our project, and then we subtract the Actual Cost, so this is how much we have spent so far, because what we're trying to find out here is how much money we still need to complete our project, which is our ETC. Etc. The way we do that is we take our final budget, which is at EAC, and then we subtract how much we already spent so far. The next formula we have is To Complete Performance Index. Now there's 2 ways that we can calculate our To Complete Performance Index, and this again would depend upon what interpretations you have applied to your project. So the standard way that we calculate our TCPI is we use BAC, which is our budget at completion, minus our earned value, and we would divide this by our BAC, or our budget at completion, minus our actual cost. This will give us a performance index of how well our project is going. Unlike what we have seen in the other indexes, if the TCPI is greater than 1, then that is actually bad. If TCPI is less than 1, then that is good. Another way that you can use to calculate your To Complete Performance Index is replacing the BAC with EAC instead. The reason that you want to do this is because if the BAC is no longer relevant, then you want to use your EAC in order to give yourself a more accurate TCPI value. And then the last formula that we will take a look at is our variance at completion. The way that we calculate our variance at completion is we use our BAC, or our budget completion, so this is at the start of our project how much we have estimated this project to cost, and we subtract that by our By our EAC, or Estimate at Completion. So throughout our project, we may need to recalculate how much it will cost us to complete the entire project, and when we recalculate this value, that becomes our EAC. The difference between the two is our VAC, or Variance at Completion, and so again, the formula is BAC minus EAC. So let's do a quick summary right now. So we looked at a lot of these formulas. Now I want to give you a really cool trick to memorize of these formulas very, very quickly. So the way that you do this is that you come up with a phrase that begins with the same first letters as all of these formulas. So it's a quick way to jog your memory as to what these formulas are. So the quick phrase that we can use is, please eat Carol's sweet cake and see the terrific violinist. So really simple phrase. What we want to note here is that the word C is actually comprising of the capital letters, so it actually spells it out. So if we go back here, what we can see is that, you know, please, that matches with the planned value. Earned value matches with EAT. Cost variance matches with CARO, and so forth. So the first letters of this phrase matches with the same first letters as the formulas that you need to know for your upcoming exam. So this is probably a really cool trick that can help you memorize all of the formulas so much faster. The way that— the reason that it works is because when you associate your brain with something that you already know with something that you don't know, you are more likely to memorize the thing that you don't know much faster because our brains work in association. So again, the phrase that you want to memorize to help jog your memory as to what all of the formulas are is Please eat Carol's sweet cake. And THE TERRIFIC VIOLINIST. And remember, C is in caps because that comprises of the 3 formulas that you need to know. So if you want to learn more cool tricks like this one, then I would want to invite you to an absolutely free 1.5-hour training. And in this free training, it's absolutely awesome because we're going to teach you the exact steps that you need to know in order to pass your PMP or your CAPM exam in the next 6 weeks. So to sign up for this class, all you need to do is to go to the URL on the slide right here, which is www.examspm.com/free. We'll also link this link in the description below. And then when you join right now, you're also going to get some amazing limited-time bonuses, so you want to do this right now. You're going to get 200 free practice questions plus ITTO mind maps for all 10 knowledge areas, and it's absolutely free when you join right now. So be sure to sign up right here. So thank you so much for joining us, guys. I hope this tip was really helpful for you. Can't wait to see you in class. See you soon.