1. Excel Future Value FV (rate,nper,pmt,pv,type)

2. Annual interest rate divided by the number of compound periods

3. FV (rate,nper,pmt,pv,type) Number of compounding periods typically (years * months)

4. FV (rate,nper,pmt,pv,type) Additional “new” money each period

5. Present Value The initial deposit FV (rate,nper,pmt,pv,type)

6. 1 if the payment is at the start of the period 0 if the payment is at the end of the period FV (rate,nper,pmt,pv,type)

7. Excel requirement 1: This value must be calculated by the users before it can be entered into the formula

8. FV (rate,nper,pmt,pv,type) Annually? Semi annually? Quarterly? Monthly? Daily? THINK!

9. Should the users be burdened with making this mental calculation?

10. FV (rate,nper,pmt,pv,type) Excel requirement 2: This value must be calculated by the users before it can be entered into the formula

11. Excel expects the users to remember to multiply (years * compounding periods) to obtain this number FV (rate,nper,pmt,pv,type) THINK!

12. Should the users be burdened with remembering this rule?

13. FV (rate,nper,pmt,pv,type) Excel requirement 3: The users must remember to enter these values as negative numbers

14. FV (rate,nper,pmt,pv,type) WHY?

15. Excel requirement 4: If you make the payment at the beginning of the month, enter a 1 If you make the payment at the end of the month enter a 0 FV (rate,nper,pmt,pv,type)

16. Collecting all of the Excel rules: 1Compute periodic interest rate first 2Compute number of compounds next 3Remember to enter negative amounts 4Remember the 1 and 0 rule

17. Why burden the users with remembering all of these rules? When designing spreadsheets, it is your responsibility to design them so that the users do not have to remember these rules. Users want correct answers in a minimal amount of time.

18. When designing for usability... …ask simple questions that: your users can answer don’t require mental math don’t require value judgments

19. Think like your users, but do not expect them to: think like you act like you know what you know

20. How can you, as the spreadsheet developer, apply your knowledge to design easy to use spreadsheets?

21. The rate can be determined in two simple questions What is the annual interest rate? How many compound periods per year? annual rate / periods = raterate

22. The nper can be determined in two simple questions How long is the investment in years? How many compound periods per year? Years * periods = nper nper

23. How much is each monthly deposit? DO NOT ask your users to, “Enter your monthly deposit as a negative number.” Put the negative sign in the formula =FV(rate,nper,-pmt,pv,type)

24. How much is your first deposit? DO NOT ask your users to, “Enter your first deposit as a negative number.” Put the negative sign in the formula =FV(rate,nper,-pmt,-pv,type)

25. If you make your first additional deposit on the first day of the month, enter 1 If you make your deposit on the last day of the month, enter 0 =FV(rate,nper,-pmt,-pv,type)

26. Go to the spreadsheet

27. WHY?