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. Itâ€™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.