Exploring Excel 2003 Revised - Grauer and Barber 1 Committed to Shaping the Next Generation of IT Experts. Chapter 4: Spreadsheets in Decision Making: What If? Robert Grauer and Maryann Barber Exploring Microsoft Excel 2003 Revised Edition

Exploring Excel 2003 Revised - Grauer and Barber 2 Objectives Use the PMT function to calculate the payment of a car loan or mortgage. Use the FV function to determine the future value of a retirement account Explain how the Goal Seek command facilitates the decision-making process Use mixed references to vary two parameters in a table Use the AVERAGE, MAX, MIN, and COUNT functions

Exploring Excel 2003 Revised - Grauer and Barber 3 Objectives (continued) Use the IF and VLOOKUP functions to implement decision making Freeze, unfreeze, hide, and unhide, rows and columns in a worksheet Use the AutoFilter command to display selected records in a list Describe the options in the Page Setup command used with large worksheets

Exploring Excel 2003 Revised - Grauer and Barber 4 Case Study: Bill’s Autos In this case study, students create a flexible car payment calculator. They use the PMT function to determine the monthly payment. They then use mixed references to create a table showing the amount of the payment, given different amounts financed and interest rates.

Exploring Excel 2003 Revised - Grauer and Barber 5 Using Functions Function – a predefined computational task Requires arguments  Values the function uses to calculate answers Returns a value

Exploring Excel 2003 Revised - Grauer and Barber 6 The PMT Function Calculates a periodic payment, such as a car or mortgage payment Based on:  Amount financed  Interest rate  Number of periods

Exploring Excel 2003 Revised - Grauer and Barber 7 Using the PMT function Interest rate divided by 12 Number of payments multiplied by 12 Amount financed expressed as a negative number Amount financed, interest rate, and the term, are all isolated as assumptions. One or more assumptions can be changed

Exploring Excel 2003 Revised - Grauer and Barber 8 The FV function Returns the future value of a series of payments  For example, contributions to your 401K or IRA Based on:  Number of periods  Expected rate of return  Amount invested each period

Exploring Excel 2003 Revised - Grauer and Barber 9 Using the FV Function Amount of contribution, rate of return, and years contributing are all expressed as assumptions

Exploring Excel 2003 Revised - Grauer and Barber 10 Inserting a Function Use the Insert Function command from the Insert menu Use the list box to select the name of the function  Functions are categorized Let the Wizard help you enter the arguments  Point to enter cell references  Use the Collapse button to collapse the dialog box

Exploring Excel 2003 Revised - Grauer and Barber 11 The Function Wizard Enter arguments into text boxes Collapse button shrinks dialog box if necessary Value returned by the function (answer) is displayed

Exploring Excel 2003 Revised - Grauer and Barber 12 The Goal Seek Command Allows you to set an end result and vary the inputs (assumptions) to produce that result  Only one input can be varied at a time All other assumptions remain constant  For example, set a desired monthly car payment Vary the amount financed Interest rate and number of months remain the same

Exploring Excel 2003 Revised - Grauer and Barber 13 Using the Goal Seek Command Enter the cell containing the desired result Enter the desired value Enter the cell containing the desired result

Exploring Excel 2003 Revised - Grauer and Barber 14 Hands-on Exercise 1 Title of Exercise: Basic Financial Functions Objective: To illustrate the PMT and FV functions; to illustrate the Goal Seek command.  Input file: None  Output file: Basic Financial Functions

Exploring Excel 2003 Revised - Grauer and Barber 15 Developing Proficiency Use relative and absolute references correctly  Use relative cell references if the value will change when a cell is copied  Use absolute references if the value remains constant (typically assumptions) Mixed references  Use when either the row or the column will change Isolate your assumptions  Formulas in cells refer to the assumptions area, not to the actual values

Exploring Excel 2003 Revised - Grauer and Barber 16 Using Mixed References Mixed references used for number of payments, rate of return Absolute reference used for amount of contribution

Exploring Excel 2003 Revised - Grauer and Barber 17 Hands-on Exercise 2 Title of Exercise: Advanced Financial Functions Objective: To use relative, absolute, and mixed references in conjunction with the PMT and FV functions; to practice various formatting commands.  Input file: None  Output file: Advanced Financial Functions

Exploring Excel 2003 Revised - Grauer and Barber 18 Statistical Functions MAX, MIN, and AVERAGE functions  Return highest, lowest, and average values from an argument list Argument list may include cell references, cell ranges, values, functions, or formulas Cells that are empty or contain text are not included COUNT and COUNTA functions  COUNT returns number of cells containing numeric entries or formulas that return a number  COUNTA also includes cells with text

Exploring Excel 2003 Revised - Grauer and Barber 19 Using Functions versus Formulas In general, use functions instead of formulas  Functions are adjusted as rows or columns are deleted or added within the range referenced by the function  With formulas Adding a row adjusts the cell references in the formula, but does not include the new row in the formula Deleting a row causes a #REF error message

Exploring Excel 2003 Revised - Grauer and Barber 20 The IF Function Enables decision making in a worksheet Requires three arguments:  A condition  A value if the condition is true  A value if the condition is false Condition must be able to be evaluated as true or false  Uses relational operators (=, <, etc.)

Exploring Excel 2003 Revised - Grauer and Barber 21 Using the IF Function Incorrectly Value_if_true entered as a conditional test. Function will return True or False

Exploring Excel 2003 Revised - Grauer and Barber 22 Using the IF Function Correctly Value_if_true entered as a value. Value_if_false entered as a cell reference

Exploring Excel 2003 Revised - Grauer and Barber 23 The VLOOKUP function Allows Excel to look up a value in a table and return a related value Requires three arguments:  the numeric value (or cell) to look up  the range of the table  the column number containing the value you want to return

Exploring Excel 2003 Revised - Grauer and Barber 24 Using the VLOOKUP Function This argument tells the function where to look. Absolute references used for the table Look in the second column of the table, NOT in column J Look up the value found in cell I4, in this case, the semester average

Exploring Excel 2003 Revised - Grauer and Barber 25 Working With Large Worksheets Scrolling causes the screen to move horizontally or vertically as you change the active cell  Drag the horizontal or vertical scroll bars  Click above or below vertical scroll bars  Click to the left or right of horizontal scroll bars Freezing Panes allows row and column headings to remain visible while scrolling Hiding rows and columns makes rows and columns invisible on the monitor or when printed

Exploring Excel 2003 Revised - Grauer and Barber 26 Freezing Panes As you scroll back up, rows 4- 8 will become visible again

Exploring Excel 2003 Revised - Grauer and Barber 27 Printing Large Worksheets Page Preview command (View menu) lets you see where the page breaks are Page Setup command (File menu) lets you change how the sheet prints  Change from portrait (8 ½ x 11) to landscape (11 x 8 ½)  Change margins  Scale the worksheet to print on one sheet

Exploring Excel 2003 Revised - Grauer and Barber 28 The AutoFilter Command Allows you to display a selected set of rows within a worksheet  Displays rows that meet selected criteria  Other rows are hidden, not deleted Select Filter then AutoFilter from the Data menu Select criteria from the dropdown

Exploring Excel 2003 Revised - Grauer and Barber 29 Using the AutoFilter Command Click the dropdown on the Homework column, then select Poor as the criteria

Exploring Excel 2003 Revised - Grauer and Barber 30 Hands-on Exercise 3 Title of Exercise: The Expanded Grade Book Objective: To develop the expanded grade book; to use statistical (AVERAGE, MAX, and MIN) and logical (IF and VLOOKUP functions); to demonstrate scrolling and the Freeze Panes command  Input file: Expanded Grade Book  Output file: Expanded Grade Book Solution

Exploring Excel 2003 Revised - Grauer and Barber 31 Summary Financial functions (PMT and FV) Goal Seek enhances decision making Statistical functions (MAX, MIN, AVERAGE, COUNT, and COUNTA) Decision making functions (IF, VLOOKUP, and HLOOKUP) Isolate and clearly label initial assumptions

Exploring Excel 2003 Revised - Grauer and Barber 32 Summary (continued) Copy using fill handle Use scrolling & the Freeze Panes command to work with large worksheets Page Setup controls how the worksheet prints AutoFilter command displays only rows that meet certain criteria

Exploring Excel 2003 Revised - Grauer and Barber 33 End-of-chapter Exercises Multiple Choice Practice Exercises  Exercise 1 – Calculating Your Retirement  Exercise 2 – Alternate Grade Book  Exercise 3 – Expanded Payroll  Exercise 4 – Fuel Estimates  Exercise 5 – The Roth IRA  Exercise 6 – Celebrity Birthdays  Exercise 7 – The Health Club  Exercise 8 – Big Bopper Bank

Exploring Excel 2003 Revised - Grauer and Barber 34 End-of-Chapter Exercises (continued) Practice Exercises  Exercise 9 – Nested IFs and Other Functions  Exercise 10 – Election 2004  Exercise 11 – The Shopping Mall  Exercise 12 – Barber Academy  Exercise 13 – Excel Jeopardy Mini Cases  The Financial Consultant  Fun with the If Statement  The Lottery

Exploring Excel 2003 Revised - Grauer and Barber 35 End-of-Chapter Exercises (continued) Mini Cases (continued)  A Penny a Day  The Rule of 72  Study Break – Excel Crossword Puzzle  Signs of the Zodiac  Chapter Recap – Vacation Time

Exploring Excel 2003 Revised - Grauer and Barber 36 Questions?