1. Chapter 4 Financial Functions, Data Tables, and Amortization Schedules
Microsoft Excel 2013
Chapter 4
Financial Functions, Data Tables, and Amortization Schedules

2. Objectives
Assign a name to a cell and refer to the cell in a formula using the assigned name
Determine the monthly payment of a loan using the financial function PMT
Use the financial functions PV (present value) and FV (future value)
Create a data table to analyze data in a worksheet
Create an amortization schedule
Control the color and thickness of outlines and borders
Financial Functions, Data Tables, and Amortization Schedules

3. Objectives Add a pointer to a data table
Analyze worksheet data by changing values
Use names and print sections of a worksheet
Set print options
Protect and unprotect cells in a worksheet
Hide and unhide rows, columns, sheets, and workbooks
Use the formula checking features of Excel
Financial Functions, Data Tables, and Amortization Schedules

4. Project – Mortgage Payment Calculator with Data Table and Amortization Schedule
Financial Functions, Data Tables, and Amortization Schedules

5. Functions of Excel
Two of the more powerful aspects of Excel are its wide array of functions and its capability of organizing answers to what-if questions
A what-if analysis tool, called a data table, is used to automate data analyses and organize the answers returned by Excel
Cell protection ensures that users do not change values inadvertently that are critical to the worksheet
Financial Functions, Data Tables, and Amortization Schedules

6. Calculations for the Mortgage
Mortgage Amount = Price – Down Payment
Monthly Payment = PMT function
Total Interest = 12 * Term * Monthly Payment – Loan Amount
Total Cost = 12 * Term * Monthly Payment + Down Payment
Financial Functions, Data Tables, and Amortization Schedules

7. Amortization Schedule Calculations
Beginning Balance = Loan Amount
Ending Balance = PV function or zero
Paid on Principal = Beginning Balance – Ending Balance
Interest Paid = 12 * Monthly Payment – Paid on Principal or 0
Paid on Principal Subtotal = SUM function
Interest Paid Subtotal = SUM function
Financial Functions, Data Tables, and Amortization Schedules

8. Creating Worksheets
Do not create worksheets as if you are going to use them only once
A well-designed worksheet often is used for many years
Financial Functions, Data Tables, and Amortization Schedules

9. Creating Names Based on Row Titles
A cell name often is created from column and row titles
You also can define descriptive names that are not column titles or row titles to represent cells, ranges of cells, formulas, or constants
Assigning names to a cell or range of cells allows you to select them quickly using the Name box
Financial Functions, Data Tables, and Amortization Schedules

10. Creating Names Based on Row Titles
Financial Functions, Data Tables, and Amortization Schedules

11. Formatting the Worksheet
Excel lets you format before you enter data, when you enter data, and after you enter all the data
Spreadsheet specialists usually format a worksheet in increments as they build the worksheet
Financial Functions, Data Tables, and Amortization Schedules

12. Formatting cells
When a cell is formatted for a percent, if you enter the number .7 Excel translates the value as 70%
Financial Functions, Data Tables, and Amortization Schedules

13. Naming Cells
Naming a cell that you plan to reference in a formula helps make the formula easier to read and remember
Names are absolute cell references
When naming cells Excel is not case sensitive, therefore, you can enter the names of cells in formulas in uppercase or lowercase letters
Financial Functions, Data Tables, and Amortization Schedules

14. Naming Cells
To use a name that consists of two or more words in a formula, you should replace any space with the underscore character
Periods are also allowed in cell names, however, a cell name may not begin with a period or an underscore
Financial Functions, Data Tables, and Amortization Schedules

15. Naming Ranges
Select a cell or range, type the name in the Name box and press the ENTER key
Select a cell or range, click the Define Name button
Select a cell or range, and press CTRL + SHIFT + F3
Financial Functions, Data Tables, and Amortization Schedules

16. Using Names in Formulas
If you enter a formula using Point mode and click a cell that has an assigned name, then Excel will insert the name of the cell rather than the cell reference
Financial Functions, Data Tables, and Amortization Schedules

17. PMT Function
You can use Excel’s PMT function to determine the monthly payment
The PMT function has three argument: rate, periods, and loan amount
Its general form is as follows: =PMT(rate,periods,loan amount) where rate is the interest rate per payment period, periods is the number of payments over the life of the loan, and loan amount is the amount of the loan
Rate is written as Rate/12 because financial institutions usually calculate interest on a monthly basis
The periods in the PMT function is 12 * Term because each year includes 12 months, or 12 payments
Financial Functions, Data Tables, and Amortization Schedules

18. PMT Function
Excel considers the value returned by the PMT function to be a debit and, therefore, returns a negative number as the monthly payment
To display the monthly payment as a positive number, begin the function with a negative sign instead of an equal sign
-PMT(Rate/12, 12*Term, Loan_Amount)
Financial Functions, Data Tables, and Amortization Schedules

19. Frequently Used Financial Functions
FV (rate, periods, payment)—returns the future value of an investment based on periodic, constant payments and a constant interest rate
PMT (rate, periods, loan amount)—calculates the payment for a loan based on the loan amount, constant payments, and a constant interest rate
PV (rate, periods, payment)—returns the present value of an investment or annuity (an annuity if a series of fixed payments made at the end of each of a fixed number of periods at a fixed interest rate); the present value is the total amount that a series of future payments now is worth
Financial Functions, Data Tables, and Amortization Schedules

20. Data Tables
A data table is a range of cells that shows the answers generated by formulas in which different values have been substituted
They must be built in an unused area of the worksheet
Data tables have one purpose: to organize the answers to what-if questions
Financial Functions, Data Tables, and Amortization Schedules

21. Amortization Schedule
An amortization schedule shows the beginning and ending balances of a loan and the amount of payment that applies to the principal and interest for each year over the life of the loan
If a customer wanted to pay off the loan after six years, the Amortization Schedule section would tell the loan officer what the payoff would be
Financial Functions, Data Tables, and Amortization Schedules

22. Amortization Schedule
Financial Functions, Data Tables, and Amortization Schedules

23. Using Borders
You can use column borders, which is an unused column with a significantly reduced width, or row borders to separate sections of a worksheet
You can insert borders to differentiate portions of a worksheet. To control the color and thickness, Excel requires that you use the Border sheet in the Format Cells dialog box
Financial Functions, Data Tables, and Amortization Schedules

24. IF Function
In an IF function, you can use two double-quote symbols (“ ”) to indicate to Excel to leave the cell blank of the logical test is false
Financial Functions, Data Tables, and Amortization Schedules

25. Formatting Cells
You can start over with formatting a range by clicking the Cell Styles button and clicking Normal in the Cell Styles gallery
Financial Functions, Data Tables, and Amortization Schedules

26. Conditional Formatting
You can use conditional formatting to highlight a cell
Financial Functions, Data Tables, and Amortization Schedules

27. Printing a Range
If you find yourself continually selecting the same range in a worksheet to print, you can set a specific range to print each time you print the worksheet
When you set a range to print, Excel will continue to print only that range until you clear it
If you regularly are going to print a particular section of a worksheet, naming the section allows you to specify that section whenever you need to print it
Financial Functions, Data Tables, and Amortization Schedules

28. Naming and Printing Sections of a Worksheet
Financial Functions, Data Tables, and Amortization Schedules

29. Print Options
You can print in draft quality which speeds up printing by ignoring formatting and not printing most graphics
Financial Functions, Data Tables, and Amortization Schedules

30. Protecting a Worksheet
When building a worksheet for novice users, you should protect the cells in the worksheet that you do not want changed, such as cells that contain text or formulas
Doing so prevents users from making ill-advised changes to text and formulas in cells
If you wish to allow another worksheet user to be able to manipulate some cells, leave those cells unlocked
Financial Functions, Data Tables, and Amortization Schedules

31. Protecting a Worksheet
When you create a worksheet, all the cells are assigned a locked status, but the lock is not engaged, which leaves cells unprotected
Unprotected cells are cells whose values you can change at any time
Protected cells are cells that you cannot change
Financial Functions, Data Tables, and Amortization Schedules

32. Protecting a Worksheet
The first step in protecting a worksheet is to select the cells you want to leave unprotected and then change their cell protection settings to an unlocked status
Next, protect the worksheet
Financial Functions, Data Tables, and Amortization Schedules

33. Worksheet Protection
The Protect Sheet dialog box enables you to enter a password that can be used to unprotect the sheet
You should create a password when you want to keep others from changing the worksheet from protected to unprotected
Financial Functions, Data Tables, and Amortization Schedules

34. Hiding Worksheets
When sharing workbooks with others, you may not want them to see some of your worksheets. Hiding portions of a workbook lets you show only the parts of the workbook that the user needs to see
Financial Functions, Data Tables, and Amortization Schedules

35. Formula Checker
Similar to the spell checker, Excel has a formula checker that checks formulas in a worksheet for rule violations
Each time Excel encounters a cell with a formula that violates one of its rules, it displays a dialog box containing information about the formula and a suggestion about how to fix the formula
Financial Functions, Data Tables, and Amortization Schedules

36. Background Formula Checking
Background formula checking means that Excel continually will review the workbook for errors in formulas as you create or manipulate it
When a formula fails to pass one of the rules and background formula checking is enabled, then Excel displays a small green triangle in the upper-left corner of the cell assigned the formula in question
Financial Functions, Data Tables, and Amortization Schedules

37. Enabling Background Formula Checking
Financial Functions, Data Tables, and Amortization Schedules