exploring microsoft excel

Exploring Microsoft Excel 2002 Chapter 3

Chapter 3Spreadsheets in Decision Making: What If?

ByRobert T. GrauerMaryann Barber

Exploring Microsoft Excel


2

Objectives (1 of 2)

Describe the PMT and FV functions Use the PMT and FV functions Explain how the Goal Seek command can

facilitate decision making Define and use a mixed reference Use the AVERAGE, MAX, MIN, and COUNT

functions


3

Objectives ( 2 of 2)

Use the IF and VLOOKUP functions to help in the decision-making process

Freeze and hide rows and columns to work with large worksheets

Print and view large spreadsheets


4

Overview

Learn to use spreadsheets as a tool in decision making

Use financial functions Use statistical functions Calculate different results with the Goal

Seek command Use absolute, relative, and mixed cell

references Review the importance of isolating

assumptions and initial conditions in a worksheet


5

Analysis of a Car Loan

Can I afford it? How do I calculate

for: rebates down payments interest rates the number of

payments


6

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.


7

How Much Money Will I Have at Retirement?

The Future Value (FV) function to return the future value of a series of payments A common example would be contributions you

make to your IRA or 401K plan Use the FV function which requires the

expected rate of return, the number of periods, and the investment each period.

The Moral of the Story: Start planning for your retirement now!! The sports car can wait!!!!


8

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


9

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


10

Setting up Goal Seek

Establish PMT interest rate term down payment

Use Goal Seek change result by

changing one variable

you can only change one variable


11

Hands-On Exercise 1

Objective: to illustrate the PMT and FV functions; to illustrate the Goal Seek command Enter Descriptive Labels Enter PMT function What If? Use the Goal Seek command The FV function Format the worksheet Print the cell formulas


12

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!!


13

Hands-On Exercise 2

Objective: To use relative, absolute, and mixed references with the PMT and FV functions The Spell Check The Fill Handle Determine the 30-year payments Determine the 15-year payments Format the worksheet Merge and Center text Enter the row and column headings Create the mixed reference Copy the formula The finishing touches


14

Using Functions in Excel

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 VLOOKUP(vertical lookup) Function

assigns a value to a cell based on a numeric value in another cell


15

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.


16

The VLOOKUP function

Allows Excel to look up a value in a table and return a related value for example, Excel can look up your

average in this class and return your grade

Requires three arguments: the numeric value (or cell) to look up the range of the table the column number containing the

value you want to return


17

Managing Large Worksheets (1 of 2)

Scrolling causes the screen to move horizontally or vertically as you change the active cell

Freezing Panes allows row and column headings to be seen while scrolling

AutoFill capability enter series into adjacent cells

Hiding rows and columns makes rows and columns invisible on the monitor or when printed


18

Managing Large Worksheets (2 of 2)

Page Preview command (View menu) lets you see where the page breaks are

Page Setup command (File menu) lets you change how the sheet prints Change from portrait (8 ½ x 11) to landscape

(11 x 8 ½) Change margins Scale the worksheet to print on one sheet

AutoFilter command lets you display only rows that meet certain criteria


19

Hands-On Exercise 3 Objective: to develop the expanded

grade book; to use statistical and logical functions. The Fill Handle Format the Social Security Numbers The Freeze Panes command The IF Function The VLOOKUP function Copy the IF and VLOOKUP functions


20

Hands-On Exercise 3 cont’d

Create the summary statistics The Page Break Preview command Hiding rows and columns The AutoFilter command


21

Finished Grade Book


22

Summary (1 of 2)

Financial functions (PMT and FV) Statistical functions (MAX, MIN, AVERAGE,

and COUNT) Decision making functions (IF and VLOOKUP) Use Goal Seek to enhance decision making Isolate and clearly label initial assumptions Copy using fill handle


23

Summary (2 of 2)

Scroll & Freeze Panes to work with large worksheets

Use Page Setup to control how the worksheet prints

Use AutoFilter command to display only rows that meet certain criteria

exploring microsoft excel

Documents