Microsoft Office Tutorials and References
In Depth Information
Using Excel Functions
7. Press the Enter key. Excel calculates and
displays the payment amount as you see in
Figure 9-15.
Figure 9-14
Preparing to calculate payments.
Figure 9-15
The net payment amount.
Uniform Units
Be uniform about the units you use for
specifying rate and nper . If you make monthly
payments on a six-year loan at an annual
interest rate of 8 percent, use 8%/12 for rate
and 6*12 for nper . If you make annual
payments on the same loan, use 8 percent for
rate and 6 for nper .
Tip
The payment amount returned by PMT
includes principal and interest only.
Understanding Logical Functions
You have seen that most functions work basically the
same way. You enter the equals sign, enter the
function name, and then tell the function which data to
use. Most functions involve some sort of
mathematical calculation. Logical functions are different in that
they use operators such as equal to (=), greater than
(>), less than (<), greater than or equal to (>=), less
than or equal to (<=), and not equal to (<>).
2. Type =PMT( in the cell where you want to
display the payment amount. Excel will
immediately identify the entry as a function
and display a function ScreenTip with the
function syntax.
3. Click or type the cell address you entered for
the interest rate. The referenced cell will
have a border around it.
One of the most commonly used and most
powerful logical functions is the IF function. IF evaluates
a condition and returns one of two answers,
depending on the result of the evaluation. The IF
function has three parts. The first part determines
if a situation is true or false; the second part
determines the result to display if the first part is true;
and the third part determines the result to display
if the first part is false. It’s really not as confusing
as it may sound. The syntax is =IF( item to test, value
if true, value if false ).
4. Type a comma to separate the arguments.
5. Click or type the cell address you entered for
the number of payments and then type
another comma.
6. Click or type the cell address you entered for
the value of the loan and then type the
closing parenthesis.
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