Spreadsheet Advanced Tools Reinforcement Handout

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PAF Chapter Prep I I

Formulas in Excel

Formulas are entries that have an equation that calculates the value to display. We DO NOT type in the numbers we are looking for; we
type in the equation. This equation will be updated upon the change or entry of any data that is referenced in the equation.
In our first example, the solution was $252.61
This was NOT typed into the keyboard. The formula that was typed into the spreadsheet was:
=PMT(C4/12,C5,C3)
C4 (annual interest rate) was divided by 12 because there are 12 months in a year. Dividing by
12 will give us the interest rate for the payment period - in this case a payment period of one
month.
It is also important to type in the reference to the constants instead of the constants. Had I entered =PMT(.096/12,60,-12000) my formula
would only work for that particular set of data. I could change the months above and the payment would not change. Remember to enter
the cell where the data is stored and NOT the data itself.
Formulas are mathematical equations. There is a list of the functions available within Excel under the menu INSERT down to Function.
Formulas MUST BEGIN with an equal sign (=).
Function:
A function is a built in set of executable codes to perform a specific task. For example, the Sum() function will add a group of numbers
within the range specified in the parenthesis. But what if you want to add half the numbers, then add the other half , and multiply the two
sums together. There is no prebuilt function in Excel to do that. You need to write a formula.
Difference between an Excel formula and an Excel function?
An Excel Function is a instruction to excel to perform some built in task or calculation.

E.g. The function SUM(A1:A10) tells Excel to sum up all the values in cells A1, down to A10 and put the result in the cell where you
typed it.

A formula is an expression that produces a result and may include functions.
E.g. A1+A2 tells Excel to sum the values in cells A1 and A2 only.
Another example of a formula is A1+SUM(A2:A10)
Cell Reference
In Excel, a cell reference identifies the location a cell or group of cells in the spreadsheet. Sometimes referred to as a cell address, a cell
reference consists of the column letter and row number that intersect at the cell's location. Note that when listing a cell reference, the
column letter is always listed first.
Absolute Cell Reference
In Excel and other spreadsheets, an absolute cell reference identifies the location a cell or group of cells. Cell references are used in
formulas, functions, charts , and other Excel commands.
An absolute cell reference consists of the column letter and row number surrounded by dollar signs ( $ ). An example of an absolute cell
reference would be $C$4, $G$15, or $A$345.
Relative Cell Reference
In Excel and other spreadsheets, a relative cell reference identifies the location of a cell or group of
cells.
Cell references are used in formulas, functions, charts , and other Excel commands.
By default, a spreadsheet cell reference is relative. What this means is that as a formula or function is
copied and pasted to other cells, the cell references in the formula or function change to reflect the
function's new location.
Spreadsheet Advanced Tools Reinforcement Handout
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PAF Chapter Prep I I

In contrast, an absolute cell reference does not change when it a formula is copied and pasted to other cells.
A relative cell reference consists of the column letter and row number that intersect at the cell's location.
An example of a relative cell reference would be C4, G15, or Z2345.
Tracing Precedents and Dependents
To track errors in your spreadsheet, Excel provides a graphical view of the cells used in the calculation of the results in the active cell.
Precedent Cells are cells that are referred to by a formula in another Cell. For example, if Cell D10 contains the formula =B5,
Cell B5 is a precedent to Cell D10.
Dependent cells contain formulas that refer to other cells. For example, if Cell D10 contains the formula =B5, cell D10 is a
dependent of Cell B5.
Data Sorting:
Sorting in Excel lets you easily reorder your data based on the type of sorting that you choose.
Filtering Data:
Filters allow you to show rows of data based on the content of cells and conditions applied to them.
Advanced Filter in Excel
The Advanced Filter command on the Data menu lets you use complex criteria to filter an Excel range, but it works differently from the
Excel AutoFilter command in several important ways.
1. It displays the Advanced Filter dialog box instead of the Custom AutoFilter dialog box.
2. You type the complex criteria in a criteria range in the dialogue box.
3. Excel uses the separate criteria range in the Advanced Filter dialog box as the source for the complex criteria.
4. The Advanced Filter command does not display drop-down lists for the columns as in Autofilter.
PMT Function
PMT function returns the payment amount for a loan based on an interest rate and a constant payment schedule.
The syntax for the PMT function is:
PMT( interest_rate, number_payments, PV, FV, Type )
interest_rate is the interest rate for the loan.
number_payments is the number of payments for the loan.
PV is the present value or principal of the loan.
FV is optional. It is the future value or the loan amount outstanding after all payments have been made. If this parameter is omitted, the
Pmt function assumes a FV value of 0.


Type is optional. It indicates when the payments are due. Type can be one of the following values:
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Value Explanation
0 Payments are due at the end of the period. (default)
1 Payments are due at the beginning of the period.
If the Type parameter is omitted, the Pmt function assumes a Type value of 0.
Goal Seek
Goal Seek is used when you know what answer you want, but don't know the exact figure to input for that answer. For example, you're
quite certain that 8 multiplied by something equals 56. You just not sure what that missing number is. Is it 8 multiplied by 6? Or is it 8
multiplied by 7? Goal Seek will tell you the answer.
Scenario Manager
A scenario is a named what-if model that includes variable cells linked together by one or more formulas. Before you create a scenario,
you must design your worksheet so that it contains at least one formula thats dependent on cells that can be fed different values. For
example, you might want to compare best-case and worst-case scenarios for sales in a coffee shop, based on the number of cups of coffee
sold in a week. Scenario summary is used to summarize the information in the spreadsheet.