1. Excel Functions By Hani Almohair
Microsoft Office 2003
Excel Functions By
Hani Almohair

2. 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 the absolute and mixed reference
Use the Statistical functions , AVERAGE, MAX, MIN, COUNT and COUNTA functions
Use the logical functions AND & OR

3. Overview Learn to use spreadsheets as a tool in decision making
Use financial functions
Use statistical functions
Use absolute, relative, and mixed cell references

4. Analysis of a Car Loan Can I afford it? How do I calculate for:
rebates
Down payments
interest rates
the number of payments

5. 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.

6. =PMT(B8/12;B9*12;-B7) PMT Function
A mount of loan ( as a negative amount)
Number of periods( 4 years x 12 months/year
Interest rate per period ( annual rate divided by 12)
Remember : A function is a predefined formula

7. 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.

8. 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)
B14
B16
B15
B17
= FV (A1, A2, -A3)

9. 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

10. 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

11. 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!!

12. Relative versus absolute addressing in a worksheet
PMT Function
=PMT(B8/12;B9*12;-$B$7)
A mount of loan ( as a negative amount)
Number of periods( 4 years x 12 months/year
Interest rate per period ( annual rate divided by 12)

13. Mixed references Either the row or the column is absolute; the other is relative
FV function
=FV(C$5;$B6;-$D$3)
Absolute reference to cell D3
Mixed reference to cell $B6
Mixed reference to cell C$5.

14. Using Functions in Excel Statistical 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

15. Average Function MAX,MIN Functions =MAX(A1:A3) =MIN(A1:A3)
=(A1+A2+A3)/3
=AVERAGE(A1:A3)
=AVERAGE(A1:A3;200)
=AVERAGE(A1:A3;C2)
MAX,MIN Functions
=MAX(A1:A3)
=MIN(A1:A3)

16. COUNT and COUNTA Functions
=COUNT(A1:A3)
Returns the number of numeric entries.
=COUNTA(A1:A3)
Return the number of numeric and text entries.

17. 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.

18. IF functions
Enables decision making to be implemented within a worksheet.
=IF(condition,value-if-true, value-if-false)
Value returned for a true condition
Value returned for a true condition
Condition is either true or false

19. 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

20. 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

21. Summary Financial functions (PMT and FV)
Statistical functions (MAX, MIN, AVERAGE, and COUNT)
Decision making functions (IF )
Isolate and clearly label initial assumptions