PMP EVM Formulas Explained with Real Examples

Earned Value Management is one of the most tested quantitative topics on the PMP exam. This guide walks through every EVM formula with real numbers so you can see exactly how each calculation works.

We’ll use a single project scenario throughout so the formulas build on each other, just like they do on the exam. Try our free EVM Calculator to practice with your own numbers as you read.

The Scenario

You’re managing a software project with a total budget of $500,000 (this is your BAC — Budget at Completion). The project is scheduled to take 10 months. You’re now at the end of month 6, and here’s what your data shows:

Metric	Value	What It Means
BAC	$500,000	Total project budget
PV	$300,000	Work you planned to complete by now (60% of budget)
EV	$270,000	Value of work actually completed
AC	$320,000	What you actually spent so far

At a glance: you planned to have $300K of work done, you actually completed $270K worth, and it cost you $320K. That’s not great — you’re behind schedule AND over budget. Let’s quantify exactly how bad it is.

Variance Formulas — Are We Over or Under?

Cost Variance (CV) = EV − AC

CV = $270,000 − $320,000 = −$50,000

Interpretation: You’re $50,000 over budget. The work you’ve completed was worth $270K, but you spent $320K doing it. Negative CV = over budget. On the exam, remember: negative is bad for both CV and SV.

Schedule Variance (SV) = EV − PV

SV = $270,000 − $300,000 = −$30,000

Interpretation: You’re $30,000 behind schedule. You planned to have $300K of work done by now, but only completed $270K worth. Note that SV is measured in dollars, not time — this trips up many exam takers.

Performance Index Formulas — How Efficient Are We?

Cost Performance Index (CPI) = EV ÷ AC

CPI = $270,000 ÷ $320,000 = 0.84

Interpretation: For every dollar you spend, you’re only getting 84 cents of value. A CPI below 1.0 means cost overrun. PMI considers CPI the single most important EVM metric because once established (after about 20% project completion), it rarely changes significantly. If your CPI is 0.84 at the halfway point, the project will almost certainly finish over budget.

Schedule Performance Index (SPI) = EV ÷ PV

SPI = $270,000 ÷ $300,000 = 0.90

Interpretation: You’re completing work at 90% of the planned rate. An SPI of 0.90 means for every unit of work you planned to finish, you’ve only completed 0.9 units. You’re behind schedule but not as badly as you’re over budget.

Forecasting Formulas — Where Will We End Up?

Estimate at Completion (EAC) = BAC ÷ CPI

This is the most common EAC formula on the PMP exam. Use it when the question says “current cost performance is expected to continue.”

EAC = $500,000 ÷ 0.84 = $595,238

Interpretation: If your cost efficiency stays the same, the project will cost about $595K instead of the planned $500K — roughly $95K over budget.

The other EAC formulas (less common on the exam but still tested):

• EAC = AC + (BAC − EV) — Use when the variance was a one-time event and won’t continue. Result: $320,000 + ($500,000 − $270,000) = $550,000
• EAC = AC + (BAC − EV) ÷ (CPI × SPI) — Use when both cost and schedule performance must be considered. Result: $320,000 + ($500,000 − $270,000) ÷ (0.84 × 0.90) = $320,000 + $304,233 = $624,233
• EAC = AC + Bottom-up ETC — Use when the original estimate is fundamentally flawed (requires a new bottom-up estimate for remaining work)

Estimate to Complete (ETC) = EAC − AC

ETC = $595,238 − $320,000 = $275,238

Interpretation: You need about $275K more to finish the project. You’ve already spent $320K, so the remaining work costs almost as much as what you’ve already done — despite being 54% complete by value.

Variance at Completion (VAC) = BAC − EAC

VAC = $500,000 − $595,238 = −$95,238

Interpretation: The project is forecasted to finish about $95K over the original budget. Negative VAC = projected overrun.

To-Complete Performance Index (TCPI) = (BAC − EV) ÷ (BAC − AC)

TCPI = ($500,000 − $270,000) ÷ ($500,000 − $320,000) = $230,000 ÷ $180,000 = 1.28

Interpretation: To finish within the original $500K budget, you need a cost efficiency of 1.28 on all remaining work. Since your current CPI is 0.84, achieving 1.28 would require a dramatic improvement. A TCPI above 1.2 is generally considered unrealistic — this project will almost certainly need a budget increase or scope reduction.

Quick Reference Table

Formula	Equation	Our Example	Good vs Bad
CV	EV − AC	−$50K	Positive = under budget
SV	EV − PV	−$30K	Positive = ahead of schedule
CPI	EV ÷ AC	0.84	>1.0 = cost efficient
SPI	EV ÷ PV	0.90	>1.0 = ahead of schedule
EAC	BAC ÷ CPI	$595K	Lower than BAC = good
ETC	EAC − AC	$275K	Cost to finish
VAC	BAC − EAC	−$95K	Positive = under budget at end
TCPI	(BAC−EV) ÷ (BAC−AC)	1.28	<1.0 = achievable target

How to Memorize the Direction

This is the #1 thing that trips people up on exam day. Here’s the trick:

• Variances (CV, SV, VAC): Positive is always good. Think “positive vibes = positive project.”
• Indices (CPI, SPI): Above 1.0 is always good. Think “more than 1 = more than expected.”
• TCPI: Below 1.0 is good (you don’t need to improve). Above 1.0 means you need to be better than you’ve been.
• EAC: Lower than BAC is good. Higher than BAC means over budget.

Practice with Real Numbers

Use our free PMP EVM Calculator to plug in your own numbers and see all 8 metrics calculated instantly with color-coded results. Try different scenarios — a project that’s under budget but behind schedule, or one that’s ahead of schedule but over budget — and see how the formulas interact.

Also try the PERT Estimator and Communication Channels Calculator — two more formulas the PMP tests regularly.

Related: Read about everything changing on the 2026 PMP exam or check the full 2026 domain weights breakdown. Need a study plan? See how long to study for the PMP.