Chapter 4 Financial Functions, Data Tables, and Amortization Schedules Microsoft Excel 2013 Chapter 4 Financial Functions, Data Tables, and Amortization Schedules

Objectives Assign a name to a cell and refer to the cell in a formula using the assigned name Determine the monthly payment of a loan using the financial function PMT Use the financial functions PV (present value) and FV (future value) Create a data table to analyze data in a worksheet Create an amortization schedule Control the color and thickness of outlines and borders Financial Functions, Data Tables, and Amortization Schedules

Objectives Add a pointer to a data table Analyze worksheet data by changing values Use names and print sections of a worksheet Set print options Protect and unprotect cells in a worksheet Hide and unhide rows, columns, sheets, and workbooks Use the formula checking features of Excel Financial Functions, Data Tables, and Amortization Schedules

Project – Mortgage Payment Calculator with Data Table and Amortization Schedule Financial Functions, Data Tables, and Amortization Schedules

Functions of Excel Two of the more powerful aspects of Excel are its wide array of functions and its capability of organizing answers to what-if questions A what-if analysis tool, called a data table, is used to automate data analyses and organize the answers returned by Excel Cell protection ensures that users do not change values inadvertently that are critical to the worksheet Financial Functions, Data Tables, and Amortization Schedules

Calculations for the Mortgage Mortgage Amount = Price – Down Payment Monthly Payment = PMT function Total Interest = 12 * Term * Monthly Payment – Loan Amount Total Cost = 12 * Term * Monthly Payment + Down Payment Financial Functions, Data Tables, and Amortization Schedules

Amortization Schedule Calculations Beginning Balance = Loan Amount Ending Balance = PV function or zero Paid on Principal = Beginning Balance – Ending Balance Interest Paid = 12 * Monthly Payment – Paid on Principal or 0 Paid on Principal Subtotal = SUM function Interest Paid Subtotal = SUM function Financial Functions, Data Tables, and Amortization Schedules

Creating Worksheets Do not create worksheets as if you are going to use them only once A well-designed worksheet often is used for many years Financial Functions, Data Tables, and Amortization Schedules

Creating Names Based on Row Titles A cell name often is created from column and row titles You also can define descriptive names that are not column titles or row titles to represent cells, ranges of cells, formulas, or constants Assigning names to a cell or range of cells allows you to select them quickly using the Name box Financial Functions, Data Tables, and Amortization Schedules

Creating Names Based on Row Titles Financial Functions, Data Tables, and Amortization Schedules

Formatting the Worksheet Excel lets you format before you enter data, when you enter data, and after you enter all the data Spreadsheet specialists usually format a worksheet in increments as they build the worksheet Financial Functions, Data Tables, and Amortization Schedules

Formatting cells When a cell is formatted for a percent, if you enter the number .7 Excel translates the value as 70% Financial Functions, Data Tables, and Amortization Schedules

Naming Cells Naming a cell that you plan to reference in a formula helps make the formula easier to read and remember Names are absolute cell references When naming cells Excel is not case sensitive, therefore, you can enter the names of cells in formulas in uppercase or lowercase letters Financial Functions, Data Tables, and Amortization Schedules

Naming Cells To use a name that consists of two or more words in a formula, you should replace any space with the underscore character Periods are also allowed in cell names, however, a cell name may not begin with a period or an underscore Financial Functions, Data Tables, and Amortization Schedules

Naming Ranges Select a cell or range, type the name in the Name box and press the ENTER key Select a cell or range, click the Define Name button Select a cell or range, and press CTRL + SHIFT + F3 Financial Functions, Data Tables, and Amortization Schedules

Using Names in Formulas If you enter a formula using Point mode and click a cell that has an assigned name, then Excel will insert the name of the cell rather than the cell reference Financial Functions, Data Tables, and Amortization Schedules

PMT Function You can use Excel’s PMT function to determine the monthly payment The PMT function has three argument: rate, periods, and loan amount Its general form is as follows: =PMT(rate,periods,loan amount) where rate is the interest rate per payment period, periods is the number of payments over the life of the loan, and loan amount is the amount of the loan Rate is written as Rate/12 because financial institutions usually calculate interest on a monthly basis The periods in the PMT function is 12 * Term because each year includes 12 months, or 12 payments Financial Functions, Data Tables, and Amortization Schedules

PMT Function Excel considers the value returned by the PMT function to be a debit and, therefore, returns a negative number as the monthly payment To display the monthly payment as a positive number, begin the function with a negative sign instead of an equal sign -PMT(Rate/12, 12*Term, Loan_Amount) Financial Functions, Data Tables, and Amortization Schedules

Frequently Used Financial Functions FV (rate, periods, payment)—returns the future value of an investment based on periodic, constant payments and a constant interest rate PMT (rate, periods, loan amount)—calculates the payment for a loan based on the loan amount, constant payments, and a constant interest rate PV (rate, periods, payment)—returns the present value of an investment or annuity (an annuity if a series of fixed payments made at the end of each of a fixed number of periods at a fixed interest rate); the present value is the total amount that a series of future payments now is worth Financial Functions, Data Tables, and Amortization Schedules

Data Tables A data table is a range of cells that shows the answers generated by formulas in which different values have been substituted They must be built in an unused area of the worksheet Data tables have one purpose: to organize the answers to what-if questions Financial Functions, Data Tables, and Amortization Schedules

Amortization Schedule An amortization schedule shows the beginning and ending balances of a loan and the amount of payment that applies to the principal and interest for each year over the life of the loan If a customer wanted to pay off the loan after six years, the Amortization Schedule section would tell the loan officer what the payoff would be Financial Functions, Data Tables, and Amortization Schedules

Amortization Schedule Financial Functions, Data Tables, and Amortization Schedules

Using Borders You can use column borders, which is an unused column with a significantly reduced width, or row borders to separate sections of a worksheet You can insert borders to differentiate portions of a worksheet. To control the color and thickness, Excel requires that you use the Border sheet in the Format Cells dialog box Financial Functions, Data Tables, and Amortization Schedules

IF Function In an IF function, you can use two double-quote symbols (“ ”) to indicate to Excel to leave the cell blank of the logical test is false Financial Functions, Data Tables, and Amortization Schedules

Formatting Cells You can start over with formatting a range by clicking the Cell Styles button and clicking Normal in the Cell Styles gallery Financial Functions, Data Tables, and Amortization Schedules

Conditional Formatting You can use conditional formatting to highlight a cell Financial Functions, Data Tables, and Amortization Schedules

Printing a Range If you find yourself continually selecting the same range in a worksheet to print, you can set a specific range to print each time you print the worksheet When you set a range to print, Excel will continue to print only that range until you clear it If you regularly are going to print a particular section of a worksheet, naming the section allows you to specify that section whenever you need to print it Financial Functions, Data Tables, and Amortization Schedules

Naming and Printing Sections of a Worksheet Financial Functions, Data Tables, and Amortization Schedules

Print Options You can print in draft quality which speeds up printing by ignoring formatting and not printing most graphics Financial Functions, Data Tables, and Amortization Schedules

Protecting a Worksheet When building a worksheet for novice users, you should protect the cells in the worksheet that you do not want changed, such as cells that contain text or formulas Doing so prevents users from making ill-advised changes to text and formulas in cells If you wish to allow another worksheet user to be able to manipulate some cells, leave those cells unlocked Financial Functions, Data Tables, and Amortization Schedules

Protecting a Worksheet When you create a worksheet, all the cells are assigned a locked status, but the lock is not engaged, which leaves cells unprotected Unprotected cells are cells whose values you can change at any time Protected cells are cells that you cannot change Financial Functions, Data Tables, and Amortization Schedules

Protecting a Worksheet The first step in protecting a worksheet is to select the cells you want to leave unprotected and then change their cell protection settings to an unlocked status Next, protect the worksheet Financial Functions, Data Tables, and Amortization Schedules

Worksheet Protection The Protect Sheet dialog box enables you to enter a password that can be used to unprotect the sheet You should create a password when you want to keep others from changing the worksheet from protected to unprotected Financial Functions, Data Tables, and Amortization Schedules

Hiding Worksheets When sharing workbooks with others, you may not want them to see some of your worksheets. Hiding portions of a workbook lets you show only the parts of the workbook that the user needs to see Financial Functions, Data Tables, and Amortization Schedules

Formula Checker Similar to the spell checker, Excel has a formula checker that checks formulas in a worksheet for rule violations Each time Excel encounters a cell with a formula that violates one of its rules, it displays a dialog box containing information about the formula and a suggestion about how to fix the formula Financial Functions, Data Tables, and Amortization Schedules

Background Formula Checking Background formula checking means that Excel continually will review the workbook for errors in formulas as you create or manipulate it When a formula fails to pass one of the rules and background formula checking is enabled, then Excel displays a small green triangle in the upper-left corner of the cell assigned the formula in question Financial Functions, Data Tables, and Amortization Schedules

Enabling Background Formula Checking Financial Functions, Data Tables, and Amortization Schedules