Solving 2 nonlinear equations with Excel Solver

[chunkie]

Hi, i'm a noob in excel so i hope u'll can help me with this.

I need to solve 2 non-linear equations which i understand can be solved using Excel Solver. Basically, the equations are derived from the Black Scholes Model.

Eo = Vo*N(d1) - [D*e^(-r*T)]*N(d2)
σE*Eo = N(d1)*σv*Vo

where d1 - [ln(Vo/D)+(r+(σv^2)/2)T]/σv*sqrt(T)
d2 = d1 - σv*sqrt(T)

the 2 unknowns are σv & Vo. from these 2 values, i'll then be able to derive d1 and d2 which are also unknown.

can anyone point me in the right direction on how to use solver to solve the above prob e.g. what constraints should i input etc. or are there any website tutorials with step-by-step guides? cuz my knowledge of excel is rather limited.

Thank you in advance for any help!

 

[chunkie]

no one knows??

 

[VoG]

This article may help you http://www.vertex42.com/ExcelArticles/excel-solver-examples.html

 

[chunkie]

Hi, thanks for the link. I've tried the above method. However, the N(d1) and N(d2) i found are both 1. I am not sure where I went wrong. What I did was to constraint both the equations to be 0 and use solver to find the minimum of eqn1^2+eqn^2. Is there anything I've missed out?