Excel Functions By Hani Almohair Microsoft Office 2003

Excel Functions

By

Hani Almohair

Microsoft Office 2003

Objectives

Describe the PMT (payment) and FV (future value) functions

Use the PMT and FV functions Use the IF function to help in the decision-making

process: provide decision making

Define and use a mixed reference Use the Statistical functions , AVERAGE, MAX, MIN,

COUNT and COUNTA functions Use the logical functions AND & OR

Overview Learn to use spreadsheets as a tool in decision

making Use financial functions Use statistical functions Use absolute, relative, and mixed cell references

Analysis of a Car Loan

Can I afford it? How do I calculate

for: rebates Down payments interest rates the number of

payments

Analysis of a Car Loan

Set up a worksheet template with initial conditions

Use a PMT function which requires interest rate/period, number of periods, and amount of loan Payment amounts and the number of payments

are usually expressed in months, while interest rates are annual rates. Divide the interest rate by 12 to come up with a monthly rate

The amount of the loan (present value) should be expressed as a negative number.

PMT Function

Remember : A function is a predefined formula

=PMT(B8/12;B9*12;-B7)

Interest rate per period ( annual rate divided by 12)

Number of periods( 4 years x 12 months/year

A mount of loan ( as a negative amount)

How Much Money Will I Have at Retirement?

The Future Value (FV) function to return the future value of a series of payments

Use the FV function which requires the expected rate of return, the number of periods, and the investment each period.

FV Function (the rate of return)

Use the FV function which requires the expected rate of return, the number of

periods, and the investment each period.

Amount at retirement = FV (rate of return, Term, Periodic payment)

B17

B15

B16B14

= FV (A1, A2, -A3)

Inserting a Function

Use the Insert Function command from the Insert menu

Use the list box to select the name of the function functions categorized by function

Let the Wizard help you enter the arguments

Isolate Your Assumptions

Enter your assumptions (the arguments needed for the function) into cells and use those cells for your arguments For example, in the PMT function, enter the

loan amount, number of payments, and interest rate into cells, then use those cells in the PMT function

Change the values in those cells to test different scenarios Easier than editing the formula when you want

to change on or more of your variables

Getting the most from Excel

Relative versus absolute addressing in a worksheet Knowing the difference and when to use each

when copying makes setting up your worksheet more efficient and more accurate

Mixed references Either the row or the column is absolute; the

other is relative Don’t forget to isolate your assumptions!!

PMT Function

=PMT(B8/12;B9*12;-$B$7)

Interest rate per period ( annual rate divided by 12)

Number of periods( 4 years x 12 months/year

A mount of loan ( as a negative amount)

Relative versus absolute addressing in a worksheet

Mixed referencesEither the row or the column is absolute; the other is relative

FV function=FV(C$5;$B6;-$D$3)

Mixed reference to cell C$5.

Mixed reference to cell $B6

Absolute reference to cell D3

Using Functions in ExcelStatistical Functions

Statistical Functions: MAX,MIN, AVERAGE, COUNT and COUNTA Use functions instead of arithmetic

expressions IF function enhances decision

making allows for different results based on

different conditions

Average Function

=(A1+A2+A3)/3 =AVERAGE(A1:A3) =AVERAGE(A1:A3;200) =AVERAGE(A1:A3;C2)

MAX,MIN Functions

=MAX(A1:A3)

=MIN(A1:A3)

COUNT and COUNTA Functions

=COUNT(A1:A3)Returns the number of numeric

entries. =COUNTA(A1:A3) Return the number of numeric and

text entries.

The IF function

Allows for different results, based on a condition for example, if you work over forty hours in a

week, you will receive overtime pay Requires three arguments:

a condition, which Excel must be able to evaluate as true or false

a value if true a value if false

The value if true and value if false may contain additional (nested) IF functions for more complex decisions.

IF functions

Enables decision making to be implemented within a worksheet.

=IF(condition,value-if-true, value-if-false)

Condition is either true or false

Value returned for a true condition

Value returned for a true condition

Operators that used with IF Function

Operator Description = Equal to <> not equal to < less than > Greater than <= less than or equal to >= Greater than or equal to

AND & OR

And: return true if all its arguments are true, return false if any argument are false.

OR: returns true if any arguments are true, return false if all arguments are false

Summary

Financial functions (PMT and FV) Statistical functions (MAX, MIN,

AVERAGE, and COUNT) Decision making functions (IF ) Isolate and clearly label initial

assumptions