1 Committed to Shaping the Next Generation of IT Experts. Chapter 4: Spreadsheets in Decision Making: What If? Robert Grauer and Maryann Barber Exploring Microsoft Excel 2003

2 Objectives Use the PMT function to calculate the payment of a car loan or mortgage. Use the FV function to determine the future value of a retirement account Explain how the Goal Seek command facilitates the decision-making process Use mixed references to vary two parameters in a table Use the AVERAGE, MAX, MIN, and COUNT functions

3 Objectives (continued) Use the IF and VLOOKUP functions to implement decision making Freeze, unfreeze, hide, and unhide, rows and columns in a worksheet Use the AutoFilter command to display selected records in a list Describe the options in the Page Setup command used with large worksheets

4 Using Functions Function – a predefined computational task Requires arguments  Values the function uses to calculate answers Returns a value

5 The PMT Function Calculates a periodic payment, such as a car or mortgage payment Based on:  Amount financed  Interest rate  Number of periods

6 Using the PMT function Interest rate divided by 12 Number of payments multiplied by 12 Amount financed expressed as a negative number Amount financed, interest rate, and the term, are all isolated as assumptions. One or more assumptions can be changed

7 The FV function Returns the future value of a series of payments  For example, contributions to your 401K or IRA Based on:  Number of periods  Expected rate of return  Amount invested each period

8 Using the FV Function Amount of contribution, rate of return, and years contributing are all expressed as assumptions

9 Inserting a Function Use the Insert Function command from the Insert menu Use the list box to select the name of the function  Functions are categorized Let the Wizard help you enter the arguments  Point to enter cell references  Use the Collapse button to collapse the dialog box

10 The Function Wizard Enter arguments into text boxes Collapse button shrinks dialog box if necessary Value returned by the function (answer) is displayed

11 The Goal Seek Command Allows you to set an end result and vary the inputs (assumptions) to produce that result  Only one input can be varied at a time All other assumptions remain constant  For example, set a desired monthly car payment Vary the amount financed Interest rate and number of months remain the same

12 Using the Goal Seek Command Enter the cell containing the desired result Enter the desired value Enter the cell containing the desired result

13 Developing Proficiency Use relative and absolute references correctly  Use relative cell references if the value will change when a cell is copied  Use absolute references if the value remains constant (typically assumptions) Mixed references  Use when either the row or the column will change Isolate your assumptions  Formulas in cells refer to the assumptions area, not to the actual values

14 Using Mixed References Mixed references used for number of payments, rate of return Absolute reference used for amount of contribution

15 Statistical Functions MAX, MIN, and AVERAGE functions  Return highest, lowest, and average values from an argument list Argument list may include cell references, cell ranges, values, functions, or formulas Cells that are empty or contain text are not included COUNT and COUNTA functions  COUNT returns number of cells containing numeric entries or formulas that return a number  COUNTA also includes cells with text

16 Using Functions versus Formulas In general, use functions instead of formulas  Functions are adjusted as rows or columns are deleted or added within the range referenced by the function  With formulas Adding a row adjusts the cell references in the formula, but does not include the new row in the formula Deleting a row causes a #REF error message

17 The IF Function Enables decision making in a worksheet Requires three arguments:  A condition  A value if the condition is true  A value if the condition is false Condition must be able to be evaluated as true or false  Uses relational operators (=, <, etc.)

18 Using the IF Function Incorrectly Value_if_true entered as a conditional test. Function will return True or False

19 Using the IF Function Correctly Value_if_true entered as a value. Value_if_false entered as a cell reference

20 The VLOOKUP function Allows Excel to look up a value in a table and return a related value 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

21 Using the VLOOKUP Function This argument tells the function where to look. Absolute references used for the table Look in the second column of the table, NOT in column J Look up the value found in cell I4, in this case, the semester average

22 Working With Large Worksheets Scrolling causes the screen to move horizontally or vertically as you change the active cell  Drag the horizontal or vertical scroll bars  Click above or below vertical scroll bars  Click to the left or right of horizontal scroll bars Freezing Panes allows row and column headings to remain visible while scrolling Hiding rows and columns makes rows and columns invisible on the monitor or when printed

23 Freezing Panes As you scroll back up, rows 4- 8 will become visible again

24 Printing Large Worksheets 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

25 The AutoFilter Command Allows you to display a selected set of rows within a worksheet  Displays rows that meet selected criteria  Other rows are hidden, not deleted Select Filter then AutoFilter from the Data menu Select criteria from the dropdown

26 Using the AutoFilter Command Click the dropdown on the Homework column, then select Poor as the criteria

27 Summary Financial functions (PMT and FV) Goal Seek enhances decision making Statistical functions (MAX, MIN, AVERAGE, COUNT, and COUNTA) Decision making functions (IF, VLOOKUP, and HLOOKUP) Isolate and clearly label initial assumptions

28 Summary (continued) Copy using fill handle Use scrolling & the Freeze Panes command to work with large worksheets Page Setup controls how the worksheet prints AutoFilter command displays only rows that meet certain criteria

29 Hands-on Exercise 1 Title of Exercise: Basic Financial Functions Objective: To illustrate the PMT and FV functions; to illustrate the Goal Seek command.  Input file: None  Output file: Basic Financial Functions

30 Hands-on Exercise 2 Title of Exercise: Advanced Financial Functions Objective: To use relative, absolute, and mixed references in conjunction with the PMT and FV functions; to practice various formatting commands.  Input file: None  Output file: Advanced Financial Functions

31 Hands-on Exercise 3 Title of Exercise: The Expanded Grade Book Objective: To develop the expanded grade book; to use statistical (AVERAGE, MAX, and MIN) and logical (IF and VLOOKUP functions); to demonstrate scrolling and the Freeze Panes command  Input file: Expanded Grade Book  Output file: Expanded Grade Book Solution

32 End-of-chapter Exercises Page 487 #2. (Use Figure 4.18 on page 157 as a guide) Use the Chapter 4 Practice 2 workbook from your data disk. Print both the computed values and the cell formulas. Page 488 #3. (Use Figure 4.19 on page 488 as a guide) Use the Chapter 4 Practice 3. Print both the computed values and the cell formulas. Page 492 #7 (use Figure 4.23 on page 492 as a guide) Use the Chapter 4 Practice 7 Print both the computed values and the cell formulas.

33 Questions?