New Perspectives on Microsoft

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Microsoft Excel 2002

• Tutorial 2 Working With Formulas and Functions

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Use Excels functions

• You can easily calculate the sum of a large
  number of cells by using a function.
• A function is a predefined, or built-in, formula
  for a commonly used calculation.
• Each Excel function has a name and syntax.
• The syntax specifies the order in which you must
  enter the different parts of the function and the
  location in which you must insert commas,
  parentheses, and other punctuation
• Arguments are numbers, text, or cell references
  used by the function to calculate a value
• Some arguments are optional

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Work with the Insert Function button

• Excel supplies more than 350 functions organized
  into 10 categories
• Database, Date and Time, Engineering, Financial,
  Information, Logical, Lookup, Math, Text and
  Data, and Statistical functions
• You can use the Insert Function button on the
  Formula bar to select from a list of functions.
• A series of dialog boxes will assist you in
  filling in the arguments of the function and this
  process also enforces the use of proper syntax.

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Math and Statistical functions
This chart shows some commonly used math and
statistical functions and a description of what
they do.
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Define functions, and functions within functions

• The SUM function is a very commonly used math
  function in Excel.
• A basic formula example to add up a small number
  of cells is A1A2A3A4, but that method would
  be cumbersome if there were 100 cells to add up.
• Use Excel's SUM function to total the values in a
  range of cells like this SUM(A1A100).
• You can also use functions within functions.
  Consider the expression ROUND(AVERAGE(A1A100),1)
  .
• This expression would first compute the average
  of all the values from cell A1 through A100 and
  then round that result to 1 digit to the right of
  the decimal point

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Open the Insert Function dialog box

• To get help from Excel to insert a function,
  first click the cell in which you wish to insert
  the function.
• Click the Insert Function button. This action
  will open the Insert Function dialog box.
• If you do not see the Insert Function button, you
  may need to select the appropriate toolbar or add
  the button to an existing toolbar.

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Examine the Insert Function dialog box
This dialog box appears when you click the Insert
Function button. It can assist you in defining
your function.
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Insert Function helpful tips

• In the Insert Function dialog box you can type in
  a description of what you would like to do in the
  Search for a function text box and then click the
  Go button, and Excel will come up with some
  suggestions for you.
• You may also select a category from the drop-down
  box, or choose All, which will list every
  function in Excel alphabetically.
• Once you make your selection and click the OK
  button, another dialog box shows you all the
  arguments for the function.
• The arguments shown in boldfaced type are
  required
• While the cursor is in an argument's text box,
  you can either enter a value or click a cell and
  that cell will appear in the text box, saving you
  the trouble of typing it

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Excel's financial functions

• Financial functions are very useful to calculate
  information about loans.
• Common functions are FV, IPMT, PMT, PPMT and PV.
• All these financial functions will use similar
  arguments that differ based upon which function
  you are using.
• Think of the arguments as members of an equation
• The arguments represent the values of the
  equation that are known and the function provides
  the solution for a single variable, or unknown,
  value

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Use the financial functions

• The FV function calculates the future value of an
  investment based on periodic, constant payments
  and a constant interest rate per period.
• The IPMT function provides the interest payment
  portion of the overall periodic loan payment.
• The PMT function calculates the entire periodic
  payment of the loan.
• The PPMT function calculates just the principal
  payment portion of the overall periodic payment.
• The PV function calculates the present value of
  an investment.

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Financial Function descriptions
This chart shows some commonly used financial
functions and a description of what they do.
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Recognize optional arguments

• In the preceding figure, note how rate and nper
  are arguments for each function.
• For some of the functions, the final two
  arguments of each function are in brackets. These
  represent optional arguments, meaning if you do
  not enter anything, the default values for these
  arguments will be used.
• For example, note the PMT function has fv and
  type as its final two arguments, which are
  optional. The assumed values, if no others are
  supplied, are 0 for both
• Arguments without brackets do not have default
  values, so you must supply values or cell
  references in order for the function to be able
  to return a value.

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Use the Insert Function dialog box to enter
function arguments
This figure depicts how you would enter argument
values for the PMT function using the Insert
Function dialog box.
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Copy and paste formulas and functions

• Copying and pasting a cell or range of cells is a
  simple, but highly effective means for quickly
  filling out a large worksheet.
• To copy and paste a cell or range
• Select the cell or range to be copied and then
  click the Copy button on the standard toolbar
• Select the cell or range into which you want to
  copy the selection and then click the Paste
  button on the standard toolbar
• Once you are finished pasting, press the Esc key
  to deselect the selection

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Copy and paste effects on cell references

• Copied formulas or functions that have cell
  references are adjusted for the target cell or
  range of cells.
• For example, if cell G5 contains the formula
  F5B5/B7, and you copy and paste this formula to
  cell G6, the formula in cell G6 will be
  F6B6/B8.
• This may or may not be correct for your
  worksheet, depending upon what you are trying to
  do.
• You can control this automatic adjusting of cell
  references through the use of relative and
  absolute references.

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Using copy and paste to copy formulas

• A perfect example of using the copy and paste
  formulas is the Payment Schedule section on the
  Mortgage worksheet in the figure on the next
  slide.
• Note in the Mortgage Worksheet figure that the
  first row of data, functions and formulas is
  filled out. This same format needs to be repeated
  for as many payments as there are.
• Since you have 240 payments, as shown in cell B8,
  you will need 240 rows of data in the Payment
  Schedule. The same basic math applies for each
  column in the schedule.

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The Mortgage Worksheet
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The Mortgage Worksheet

• You can see that the period number should
  increment by 1 as you go down the rows until you
  reach the 240th payment.
• The Extra payment column is 0 by default and is
  not derived from any other cells, but is a factor
  in calculating the remaining amount due on the
  loan.
• You can see where the Balance, Interest,
  Principal and Remaining columns would logically
  be based on some of the summary information, the
  current period and/or data from a previous
  period, or row.
• Setting up these formulas and functions correctly
  will allow you to easily and quickly fill out the
  entire payment schedule, but this will require
  some special attention and adjustments to those
  expressions.

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A cell range created by copy and paste
The cells within the dark border have been copied
from the cells in the dotted border.
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Problems using copy and paste with formulas

• When Excel does not have enough room to display
  an entire value in a cell, it uses a string of
  these symbols to represent that value. To view
  the values, increase the width of the H and J
  columns.
• The formula in cell J5 is F5-(H5I5) and this
  was pasted into cell J6 by updating the cell
  references there to F6-(H6I6).
• Cell G5 has the formula F5B5/B7 and cell G6
  contains F6B6/B8. This is where things went
  wrong. Sometimes this automatic update is very
  useful and other times it does not give you the
  desired result for your worksheet.
• In this case, cells B5 and B7 should be
  referenced in the formula in column G in all 240
  payment period rows, but in column J, you want
  the cell references to be automatically updated.
  You can control this result using relative and
  absolute references.

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Use relative references

• A relative reference is a cell reference that
  shifts when you copy it to a new location on a
  worksheet.
• A relative reference changes in relation to the
  change of location.
• If you copy a formula to a cell three rows down
  and five columns to the right, a relative
  reference to cell B5 in the source cell would
  become G8 in the destination cell.

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Use absolute references

• An absolute reference is a cell reference that
  does not change when you copy the formula to a
  new location.
• To create an absolute reference, you preface the
  column and row designations with a dollar sign
  ().
• For example, the absolute reference for B5 would
  be B5.
• This cell reference would stay the same no matter
  where you copied the formula.

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Use mixed references

• A mixed reference combines both relative and
  absolute cell references.
• You can effectively lock either the row or the
  column in a mixed reference.
• For example, in the case of B5, the row
  reference would shift, but the column reference
  would not
• In the case of B5, the column reference would
  shift, but the row reference would not
• You can switch between absolute, relative and
  mixed references in the formula easily in the
  edit mode or on the formula bar by selecting the
  cell reference in your formula and then pressing
  the F4 key repeatedly to toggle through the
  reference options.

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Use Excel's Auto Fill features

• When you need to copy and paste a large number of
  rows or columns, you can use a technique called
  Auto Fill using the fill handle.
• The fill handle is a small black square located
  in the lower-right corner of a selected cell or
  range.
• When you drag the fill handle, Excel
  automatically fills in the formulas and formats
  used in the selected cells.
• The same rules for relative, absolute, and mixed
  references apply for Auto Fill as for copy and
  paste.

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Auto Fill features

• The Fill behavior depends on the date(s) with
  which you start.
• If you select two or more dates separated by a
  month, then Excel will increment the auto filled
  dates by a month as well.
• If you select only one date, Excel will increment
  the dates by one day only.
• When you drag the fill handle, a small Auto Fill
  Options button appears to the lower right of the
  selected cell or range.
• Common options are Copy Cells, Fill Series, Fill
  Formatting Only and Fill Without Formatting
• If you are using the Auto Fill technique for
  dates, you have additional options to either Fill
  Days, Fill Weekdays, Fill Months or Fill Years.

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Using Auto Fill

• To use the Auto Fill feature, select the cell
  range that contains the values and/or formulas
  you want to copy.
• Click and drag the fill handle in the direction
  you want to copy and then release the mouse
  button.
• If needed, click the Auto Fill Options button,
  and then select the Auto Fill option you want to
  apply to the selected range.

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An example of Auto Fill
This figure shows the payment schedule completed
for all 240 payments of the mortgage example.
Note the Auto Fill Options button to the lower
right of the fill handle.
If you were to click the Auto Fill Options
button, you would then see the menu shown below.
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Auto Fill Options button menu options

• The Copy Cells option will copy all values and
  formulas into the selected range as well as the
  formats used to display those values and
  formulas.
• The Fill Series option copies values and formulas
  and completes any arithmetic or geometric series.
  
• The Fill Formatting Only option copies only the
  formats used to display values or formulas
  without copying the values and formulas
  themselves.
• The Fill Without Formatting option copies only
  the values and formulas without any of the
  formats used in the source range.
• If you select a date series for filling, you will
  also see the Fill Days, Fill Weekdays, Fill
  Months and Fill Years options appear.

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Create logical functions

• A function that determines whether a condition is
  true or false is called a logical function.
• Excel supports several logical functions such as
  AND, FALSE, IF, NOT, OR and TRUE.
• A very common function is the IF function, which
  uses a logical test to determine whether an
  expression is true or false, and then returns one
  value if true or another value if false.
• The logical test is constructed using a
  comparison operator that compares two expressions
  to determine if they are equal, not equal, if one
  is greater than the other, and so forth.
• The comparison operators are , , ,
• You can also make comparisons with text strings.
  You must enclose text strings within quotation
  marks.

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Using the If function

• The arguments for the IF function are
• IF(logical_test,value_if_true,value_if_false)
• For example, the function IF(A110,20,30) tests
  whether the value in cell A1 is equal to 10
• If it is, the function returns the value 20,
  otherwise the function returns the value 30
• Cell A1 could be empty or contain anything else
  besides the value 10 and the logical test would
  be false therefore, the function returns the
  value 30
• To insert an IF function, click the Insert
  Function button and search for the IF function,
  then click OK.
• When the Function Arguments dialog box appears,
  simply fill in the arguments.

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Excel's date functions

• Excel stores dates as integers, where the integer
  value represents the number of days since January
  1, 1900.
• For example, the integer value for the date
  January 1, 2008 is 39448 because that date is
  39,448 days after January 1, 1900
• You typically do not see these numbers, because
  Excel automatically formats them to appear in a
  date format.
• This method of storing dates allows you to work
  with dates the same way you work with numbers.
• Excel's commonly used date functions are DATE,
  DAY, MONTH, NOW, TODAY, WEEKDAY and YEAR.

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The TODAY and Now functions

• The TODAY and NOW functions always display the
  current date and time.
• You will not normally see the time portion unless
  you have formatted the cell to display it.
• If you use the TODAY or NOW function in a cell,
  the date in the cell is updated to reflect the
  current date and time of your computer each time
  you open the workbook.

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Commonly used date functions
Since dates are stored as integers, you can
subtract one date from another to see how many
days there are separating the two dates. The
figure below provides additional details about
the common date functions in Excel.
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Use a formula to enter the date
On the Documentation worksheet for the mortgage
analysis workbook, there is a place for the date,
as shown in the figure below. If you wanted a
fixed date to remain in cell B4, you would enter
that date. If you wanted the date in this cell to
always reflect the current date and time when you
opened the workbook, you would use the expression
NOW() or TODAY() as shown in the formula bar in
the figure.