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15 PMP Exam Formulas You Need To Know — Plus a PMP Cheat Sheet!

By July 29, 2022No Comments

When preparing for the PMP exam, you’re likely to come across a number of formulas. These PMP exam formulas can help you have a better understanding of efficient project manager strategies. They can also help ensure that you ace the PMP exam. But all the mathematical formulas involved in preparing for the PMP exam can be off-putting to many test takers, especially considering how many formulas there are to memorize.

The good news is, there’s no harm in a PMP cheat sheet before you take the exam. A PMP cheat sheet can help you memorize the formulas you need to know for the PMP exam. Let’s get into PMP exam formulas and how to learn them by heart before your exam.

Understanding PMP Exam Formulas and PMP Concepts

These PMP formulas aren’t just relevant to the exam itself. They can help you in your day to day routine as a project manager. These formulas are designed to help you hack resource management, cost management, schedule estimation, and risk estimation. Consider, for instance, earned value management (EVM), which is used to help ensure that your earnings stay on track.

PMP concepts are slightly different. These concepts help you get into the mindset behind the PMP exam, drawing on theories that PMI frequently brings into the PMP exam. PMP concepts are made to ensure that you understand the basic project management vocabulary, such as EEF, OPA, and more. It’s important to cover these as well while prepping for the PMP exam.

Why Are PMP Exam Formulas Important?

PMP exam formula questions make up a relatively small portion of the PMP exam — usually about 5-10%. However, these questions can be a significant help when it comes to passing the exam. Formula based questions vary in difficulty: some are rather straightforward, while others are quite complex. This means they will vary in points awarded. If you have the PMP exam formulas memorized, you can easily ace those questions, which will give you a big boost towards passing the exam as a whole. It’s a good idea to research the PMP exam pass rate before you take the exam to learn more.

So without further ado, let’s discuss the PMP exam formulas.

The 15 PMP Exam Formulas You Need To Know

Knowing these formulas will prove a great boon when it comes to answering the math questions on the PMP exam. However, it’s important to note first that these formulas fall under two classification categories:

  • Critical Path Method (CPM)
  • Earned Value Management (EVM)

So let’s break down the formulas within those two categories so you can get the full context.

A) Critical Path Method (CPM)

To start, here are the two PMP formulas that fall within the Critical Path Method.

PMP Exam Formulas #1: PERT Distribution

The PERT (Project Evaluation and Review Technique) Distribution is a well-known mathematical principle. This formula has two different types: triangular distribution and beta distribution.

Triangular Distribution

The Triangular Distribution formula is used to measure the cost, duration, and resource estimates of a project. In this formula, you want to find Estimated Activity Duration. To do this, consider all the possibilities: the Optimistic (O), Most Likely (M), and Pessimistic (P). Plug those numbers into the formula as shown below.

EAD = (O+M+P)/3

The result should give you a reasonable average for the estimated duration of the activity.

Beta Distribution

Beta Distribution is in many ways similar to the Triangular Distribution formula. Both are used to calculate an estimate of cost, duration, and resources. Both solve for EAD by using O, M, and P. However, the Beta Distribution formula has slightly different steps. For this formula, you will account for the Most Likely scenario being, well, most likely. This formula looks like this:

EAD = (O+4M+P)/6

Beta Distribution still solves for an average estimate, but is slightly weighted towards the Most Likely scenario.

Standard Deviation (SD)

Projects rarely go according to plan, but a savvy project manager can account for some amount of deviation from the average. This is considered a Standard Deviation or SD. SD values can be low — meaning there is little chance of deviation from the average — or high, meaning there’s a good chance of deviation from the average. This formula subtracts the Optimistic outcome from the Pessimistic outcome and then finds an average.

SD = (P-O)/6

Activity Variance

A certain amount of risk is involved in most projects, but you can measure the risk level you’re likely to face by solving for activity variance. This formula builds off the SD formula to the power of 2. See below:

Activity Variance = ((P-O)/6)^2 or SD^2

Activity Duration Range

Activity Duration Range builds on Standard Deviation and Activity Variance. You need to calculate for both the start and end of the range. Solve for the start by subtracting SD from EAD. Solve for the end by adding EAD and SD. Thus the formula you’ll need to find Activity Duration Range is:

Activity Duration Range = EAD±SD

PMP Exam Formulas #2: Float (Slack) Formulas

A good project manager should always consider the possibility of delays without harming the end date for the project. That’s what the Float (Slack) formulas are for. Delays may not always be possible, particularly if the project is on a critical path. In these cases, the float — or slack — of the project should be 0.

To solve for Float, you first need to identify Late Start (LS) and Early Start (ES) as it relates to your activity. You may also solve for Float by finding Late Finish (LF) and Early Finish (EF). In either case, subtract the early scenario from the late scenario to find the Total Float.

Float = LS – ES or LF – EF

B)Earned Value Management (EVM)

Earned Value Management itself comes with many abbreviations for PMP concepts that are all necessary in order to understand the thirteen formulas that follow. Here’s what you need to know:

  • AC = Actual Cost
  • BAC = Budget at Completion
  • CPI = Cost Performance Index
  • CV = Cost Variance
  • EAC = Estimate at Completion
  • ETC = Estimate to Complete
  • EV = Earned Value
  • PV = Planned Value
  • SPI = Schedule Performance Index
  • SV = Schedule Variance
  • TCPI = To-Complete Performance Index
  • VAC = Variance at Completion

These abbreviations will all play into the following PMP exam formulas

PMP Exam Formulas #3: Cost Variance (CV)

Cost Variance (CV) is a formula to measure the amount that the project is over or under budget at a given time. To figure out CV, you have to subtract actual cost from earned value. If the result is less than 0, the project is over budget. If the result is over 0, the project is under budget.

CV = EV-AC

PMP Exam Formulas #4: Schedule Variance (SV)

On the other hand, SV determines how far the project has varied from schedule, whether under or over schedule. For SV, subtract planned value from earned value. Like CV, if the result is less than 0, the project is behind schedule, while a result above schedule shows that the project is actually performing ahead of schedule.

SV = EV-PV

PMP Exam Formulas #5: Cost Performance Index (CPI)

CPI rates the cost performance of a job thus far and the efficiency of the resources budgeted. The result of CPI is always a ratio, and that ratio should be above 1 in order to reflect a truly efficient project. For CPI, divide earned value by actual cost as shown below.

CPI = EV/AC

PMP Exam Formulas #6: Schedule Performance Index (SPI)

SPI is the sister formula of CPI. Where CPI measures cost performance, SPI is meant to show the efficiency of the project’s schedule. For SPI, divide planned value from earned value. Just like CPI, you’re looking for a number that is above 1. If your SPI is less than 1, your project schedule may need to be improved.

SPI = EV/PV

PMP Exam Formulas #7: Budget at Completion (BAC)

BAC is a simple formula designed to calculate the total budget of the project at completion. This formula takes into account both the cost estimates of each activity but also the contingency cost reserves. Thus to solve for BAC, the formula is:

BAC = Total cost estimates + contingency cost reserves

PMP Exam Formulas #8: Estimate to Complete (ETC)

The ETC shows project managers the estimated cost that can be expected in order to finish the remaining work in the project. This formula will likely be solved multiple times throughout the project as you reassess. To solve for ETC, you will need to subtract actual cost from the estimate at completion, using the following formula:

ETC = EAC-AC

PMP Exam Formula #9: Estimate at Completion (EAC)

EAC is the sum of the total estimated cost likely to be paid by the completion of the project. It combines the actual cost to date with the estimated cost left to complete, the latter solved by subtracting earned value from budget at completion. There are a few different ways to solve for EAC, and they all depend on different scenarios.

#1: Assuming that the work ahead of time will be finished according to the previously budgeted rate

EAC = AC+(BAC-EV)

#2: Assuming that the current cost performance will likely continue for the duration of the project

EAC = BAC/CPI

#3: Assuming that the ETC work will take into consideration both CPI and SPI

EAC = AC+[(BAC-EV)/(CPIxSPI)]

PMP Exam Formulas #10: Variance at Completion (VAC)

Variance at Completion estimates the likely variance under or over budget by the time the project is completed. To figure out VAC, simply subtract EAC from BAC. This formula reads:

VAC = BAC-EAC

PMP Formulas #11: To-Complete Performance Index (TCPI)

TCPI is another formula to solve while the project is ongoing. This measures the CPI goal you will need to meet in order to complete the project with the resources you have remaining. This is a ratio formula, with the ratio representing the cost for the outstanding work within the project’s budget.

TCPI can be solved in one of two ways. If the EAC has not changed, use the first formula. If the EAC has changed, use the second formula.

#1: TCPI = (BAC-EV)/(BAC-AC)

#2: TCPI = (BAC-EV)/(EAC-AC)

PMP Exam Formulas #12: Present Value Formula

Present Value translates the time spent on the project into a money value to help assess the future cash flow of the project. This is one of the first formulas to make use of, chronologically. PV is used during the project selection process to determine whether a certain project will be worth it. It comes with its own set of abbreviations:

  • PV = Present Value
  • FV = Future Value
  • r = Interest Rate
  • n = Number of Periods

So how do you solve for PV? This formula is a little more complicated.

PV = FV/(1+r)^n

PMP Exam Formulas #13: Number of Communication Channels Formula

The Number of Communication Channels shows the complexity required for project communication. Who will you need to communicate with for each step of the project? In this formula, N typically represents the number of stakeholders in the environment. You can find Number of Communication channels by solving:

NoCC = N*(N-1)/2

PMP Exam Formulas #14: Expected Monetary Value

Before you begin a project, you’ll want to know the Expected Monetary Value (EMV). This formula assesses risk for the likelihood of occurrence and the threat if it does occur. The EMV is then calculated thus:

EMV = Impact x Probability

PMP Exam Formulas #15: Point of Total Assumption (PTA)

This formula is not necessary for every project. You will only need to use PTA in the event of a Fixed Price Incentive Fee (FPIF) contract. In these cases, any costs that run over the PTA level are considered the cause of mismanagement. Solve for PTA using the following formula:

PTA = [(Ceiling Price – Target Price)/Buyer Sharing Ratio)]+Target Cost

PMP Cheat Sheet: Knowing the Most Frequent PMP Concepts

As we said above, it’s time to go over PMP concepts, as well. These concepts are frequently used in the PMP exam and the world of project management in general.

  • Enterprise Environmental Factors (EEF)
  • Organizational Process Assets (OPA)
  • Project Management Plans

So what are these concepts? Let’s delve into them in more detail below.

PMP Concepts #1: Organizational Process Assets (OPA)

OPA covers the assets of a project manager’s process, like knowledge bases, plans, policies, and procedures. These are specific to organization performing the project, but a few common examples of OPA include:

  • Effort estimation
  • Templates for project planning
  • “Lessons learned” records of past projects
  • Project resource assignment policies
  • Company knowledge base

PMP Concepts #2: Enterprise Environmental Factors (EEF):

Sometimes environmental conditions not under the control of the project manager can impact the performance of the project. These are typically the result of the organization as a whole, and are thus:

  • Company culture or structure
  • Legal industry standards
  • Political climate
  • Marketplace conditions such as price wars

PMP Concepts #3: Project Management Plans:

So you know the resources you have and the environmental factors that are out of your control. Next it’s down to the project manager to come up with a solid project management plan, one that fits in line with their other management plan. There are a few examples of project management plans below, such as:

Subsidiary Management Plans

A project manager should have a plan for everything. These are the management plans within your management plan, including:

  • Scope Management
  • Requirements Management
  • Schedule Management
  • Cost Management
  • Quality Management
  • Resources Management
  • Communications Management
  • Risk Management
  • Stakeholder Engagement

Baselines

Your baselines include your approved cost, scope, and schedule management plans. These will be used as a basis for the performance of the project. To break this down further, that means:

  • Scope Baseline: The approved scope statement and work breakdown structure (WBS) as well as terminology
  • Cost Baseline: The approved budget for the project within a certain time
  • Schedule Baseline: The approved schedule for the project

Additional Components

So what’s left over?

  • Change Management.  This settles how change requests will be handled throughout the project.
  • Configuration Management: This determines how the project will be itemized and indexed to make sure it’s still going strong.
  • Performance Measurement Baseline: This combines scope, schedule, and cost and compares it to the actual process of the project.
  • Project Lifecycle: This measures the length of time the project will take, including each phase.
  • Development Approach: This determines what sort of model will be used, such as agile, iterative, predictive, and so on.
  • Management Reviews: Finally, the project manager reviews the project with stakeholders to get a clear sense of performance and make any changes.

These PMP exam formulas and this PMP cheat sheet will help you feel more confident in your knowledge going into the PMP exam. It helps to increase your chances of passing the test, as well as arming you with the knowledge you need going forward. We tackle all these topics in our blog, as well as in the PMP Exam Prep self-guided course, which you can check out today.

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I am very impressed with this learning system. The content is laid out in a way that will make any learner understand all the process groups and ITTOs in order to understand Project management and be equipped to excel in the test. The learning system is engaging and fun at the same time. It's very different than other learning material which is composed mostly of videos. Some improvements are needed, but in my opinion Brain Sensei is great value for money

- said durra

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At first, I was attracted to Brain Sensei training for their original learning program using a Samurai's story. And indeed it made the whole learning experience funnier - so easier. I felt like the Samurai. Then, I was amazed by The Brain Sensei Team's reactivity and help when I reached out through contact@brainsensei.com Their support was constantly reliable and efficient. I appreciated their professionalism and didn't feel on my own. At last, the course and the practice exams proved to be efficient since I passed the PMP exam - with 'Above Targe't in all Domains. So thank you so much Brain Sensei Team !! Charlene

- Charlene LU

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Overall very good. Got stuck a few times trying to find resources which I should have downloaded the before starting the program. Customer service has been great.

- Jonathan Williams

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SO far I am thoroughly enjoying the Brain Sensei PMP prep course. I have taken a Project management class as a part of my degree which I recently completed and project management has always interested me. I find the course to be educational and easy to follow. I am grateful that this course has been designed in such a way that is simple to understand all of the complexities in project management and that allows me to study at my own pace.

- Eric Browne

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The content is good and easy to understand

- Glenn

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This review is based on completing all course work through module 102. The story and interactive nature of the course are helpful for learning and relating the material. It would be nice to have the page numbers to the PMBOK guide where references are made to it. Other information that will be helpful, are the explanations to the practice questions at the end of each module. These are provided only after immediately answering the questions. Having these available in the score summary from the 'history' tab will be helpful to refresh why the answer is correct and other options are not.

- Rohan Punit

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Overall I would rate this course an 8/10. I liked how there were exams towards the end of every module and I felt that it was very useful having it laid out in different scenarios. I rate it only an 8/10 as I had some glitch/software issues and lost my progress resulting in me having to re-do modules/exams multiple times. All in all, that was maybe useful in the end as it was a way for me study or 're-learn' the course material. Thank you!

- Nikki Cordy

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Clear and precise explanations of how things work. I was never lost navigating the course.

- Gary Nicol

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A smart approach to present the information which makes it fun and engaging while at the same time preparing for the PMP exam. Brain Sensei differentiates itself from other PMP exam preps in that it delivers the knowledge through the use of storytelling technique. I recommend this course because it will help you pass your PMP exam on the first try.

- Jamal

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Loved the story telling and the practice exams. I felt very prepared when the actual exam came around.

- Josh

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One of a kind training that was truly engaging!

- Claire

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Excellent course for preparing for the PMP exam in a fun and engaging way! The practice questions resemble the actual questions on the exam making it a completely worthwhile experience.

- Rossetta

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I passed the PMP exam after taking Brain Sensei's Online PMP Certification Exam Prep. The practice exam questions were so similar to the questions that appeared on the exam. On exam day, when I sat down to take the test and started running through the questions I felt so relieved! The practice exams are also timed so you get more comfortable with the exam experience and feel better prepared when you sit down to take the test. The other differentiator was the video content throughout the modules. The concepts are taught through a story of a young samurai defending her kingdom. This will probably be the only PMP prep course where you can learn all the knowledge areas and feudal Japan at the same time. I'd recommend this course not just because of the videos but because it helped me pass my exam on the first try.

- Jackie

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Good course, but a few grammatical errors with how some questions were worded.

- Sonia

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It was good!

- Sergei

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Loved the unique approach and it still had all the info I'd expect from a full PMP exam prep course. Very responsive on questions too.

- Chris