Microsoft Office Tutorials and References

In Depth Information

**Turn On Iterative Calculations**

Turn On Iterative

Calculations

You can perform certain types of Excel

calculations by using the iterative calculation

feature.

In some Excel calculations, you cannot derive

the answer directly. Instead, you need to

perform a preliminary calculation, feed that

answer into the formula to get a new result,

feed the new result into the formula, and so

on. The idea is that each new result gets closer

to —
converges
on — the actual answer. The

process of plugging the preliminary results

back into the formula is called
iteration
.

As an example, consider a formula that

calculates net profit by subtracting the amount

paid out in profit sharing from the gross profit.

This is not a simple subtraction because the

profit sharing amount is calculated as a

percentage of the net profit. To solve this

problem, you set up your formula and then let

Excel iterate the result.

1
Build a formula that

requires an iterative

calculation to solve.

●
Circular reference arrows

are displayed in the

table.

●
In the Formulas tab, you

can click Remove Arrows

to hide the circular

reference arrows.

2
Click the File tab.

2

1

3
Click Options.

3