Microsoft Office 2003
Excel Functions
By
Hani Almohair
Objectives
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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
Overview
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Learn to use spreadsheets as a tool in decision
making
Use financial functions
Use statistical functions
Use absolute, relative, and mixed cell references
Analysis of a Car Loan
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Can I afford it?
How do I calculate
for:
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rebates
Down payments
interest rates
the number of
payments
Analysis of a Car Loan
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Set up a worksheet template with initial
conditions
Use a PMT function which requires
interest rate/period, number of periods,
and amount of loan
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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.
PMT Function
=PMT(B8/12;B9*12;-B7)
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
How Much Money Will I Have
at Retirement?
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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.
FV Function (the rate of return)
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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)
Inserting a Function
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Use the Insert Function command
from the Insert menu
Use the list box to select the name
of the function
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functions categorized by function
Let the Wizard help you enter the
arguments
Isolate Your Assumptions
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Enter your assumptions (the arguments
needed for the function) into cells and
use those cells for your arguments
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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
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Easier than editing the formula when you want
to change on or more of your variables
Getting the most from Excel
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Relative versus absolute addressing in a
worksheet
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Mixed references
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Knowing the difference and when to use each
when copying makes setting up your worksheet
more efficient and more accurate
Either the row or the column is absolute; the
other is relative
Don’t forget to isolate your assumptions!!
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)
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.
Using Functions in Excel
Statistical Functions
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Statistical Functions: MAX,MIN,
AVERAGE, COUNT and COUNTA
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Use functions instead of arithmetic
expressions
IF function enhances decision
making
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allows for different results based on
different conditions
Average Function
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=(A1+A2+A3)/3
=AVERAGE(A1:A3)
=AVERAGE(A1:A3;200)
=AVERAGE(A1:A3;C2)
MAX,MIN Functions
=MAX(A1:A3)
=MIN(A1:A3)
COUNT and COUNTA Functions
=COUNT(A1:A3)
Returns the number of numeric
entries.
 =COUNTA(A1:A3)
 Return the number of numeric and
text entries.
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The IF function
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Allows for different results, based on a
condition
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Requires three arguments:
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for example, if you work over forty hours in a
week, you will receive overtime pay
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.
IF functions
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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
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
AND & OR
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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
Summary
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Financial functions (PMT and FV)
Statistical functions (MAX, MIN,
AVERAGE, and COUNT)
Decision making functions (IF )
Isolate and clearly label initial
assumptions