Project 5 Lab Discussion
This project focuses on the power of automatic recalculation of formulas when an associated
value changes. A payment schedule provides a good base to show automatic recalculation since
there are only four input numbers and every other cell containing a number is associated with
one of the four numbers if you look at all the dependencies.
The Project 5 Example in the Project link shows you what the payment schedule should look
like.
Open a new workbook. First, start by entering four labels that tell the user what needs to be
entered. Notice that in the example these labels use wrap text. The easiest way is to type in the
label information, ignoring that the value overlaps the next cell. After all four labels are filled in,
select those cells and use the Home / Alignment section / Wrap Text icon. Now we can enter the
input values for these four elements. If you are entering the interest rate, use either 6.25% or
0.0625. Entering it as 6.25 would mean 625% when we use this number in some of the formulas
we will be entering later. It would be a good idea to format the Principal Amount as currency Home / Number Section / General drop down box and select Currency.
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Project 5 Lab Discussion
There are two calculated fields that are requested in the project description - the Number of
Months and Monthly Payment Amount. In the example, there is a blank line and then these two
entries. Type in the labels for the two fields. Excel will probably automatically apply wrap text to
these new labels since it was formatted that way above. If it does not automatically use wrap
text, then make sure that you invoke the text wrapping.
The Number of Months value is simply the Number of Years times 12 but we need to indicate
that we want this treated as a formula. All formulas start with an = symbol since Excel uses the =
symbol to distinguish a formula from a label. Rather than type in the number of years value
again, you can refer to it by using the cell reference. For example, project example uses =D6*12.
The nice thing about using cell references is that if we change the number of years value, the
number of months value will automatically be recalculated. So the goal in this exercise is after
entering the four numbers in the input section, we should never have to enter another input
number. We will use cell references instead. Since we need to convert from years to months in
several places, we will also use the number 12 but only to convert the referenced cell from years
to months.
The Monthly Payment Amount is more difficult but Excel supplies a large number of functions
that are used often in business. The PMT(...) function is the one Excel supplies for calculating a
monthly payment amount. You make the cell that will use this function the active cell and then
use Formulas tab / Insert Function. This will bring up a dialog box that will allow us to select
which function is needed. There is a category drop down box and the PMT(...) function is found
under the Financial category. Once we clicked on the Financial category, you will need to scroll
down the large number of Financial functions until you fill the PMT entry. Click on it and a
Function Wizard starts that helps us with entering the information into the arguments for the
function. The first argument is the Rate. This needs to be a monthly rate, not a yearly rate, since
we are paying monthly. So we would use the cell reference to the Yearly Interest Rate, D5, and
divide it by 12, thus enter D5/12. Notice there is no leading = symbol since there is already an =
symbol before the PMT( function - see the formula bar. The next entry is the number of periods
or month that we will be making payments. We already calculated that so use that cell reference
to D9. The last entry we need is the Present Value or the amount of the loan. Rather than having
the payment come out negative, I put a minus sign, -, before the reference to the Amount of the
Loan cell, D4. You can place the minus sign before the PMT function name in the formula bar
instead of using the -D4 mentioned in the previous sentence.
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Project 5 Lab Discussion
So we have now built the Input and Calculated sections in the project. So your spreadsheet
should look similar to below; obviously, the numbers will be different for the project.
Make sure that you set a border and shading around the input fields and the calculated fields.
You can use the Border icon under the Home tab,
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, and then choose one of the preset
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Project 5 Lab Discussion
border options, or choose More Borders…. Choosing More Borders… will bring up the
following dialog window,
,
where you can choose the line style, line color, and the edges you want the line to be applied to.
After choosing the Border properties, use the Fill tab to choose a color for the background
shading.
Next we want to add the column headers. Enter the column names from the project description.
As you enter them, ignore that you are exceeding the column width. We will apply the wrap text
formatting to all the column header cells after we enter the text. For example, enter Payment
Date in A12 and then tab. You are now in B12 where you can enter Old Balance. After entering
the text for the column headers, select A12 through F12, use the Wrap Text icon,
, or use
the Home / Cells section / Format / Format Cells to bring up the tabbed dialog box. This tabbed
dialog box gives you more control in formatting the selected cells. In the Alignment tab, click
on wrap text, use the Center Horizontal and Center Vertical options in the text alignment section.
Click on the Font tab to choose bold and possibly increase font size by one or two points. Click
on the Border tab to select a line width, line color, and the parts of the border that will use the
selected line width and color. Click on the Fill tab if you want to add a background color to the
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Project 5 Lab Discussion
column header information. After you click the OK button, you will need to click in a different
cell to see what it will look like without the selected highlighting. Below is an example.
We need to complete the first two rows of the payment schedule before we can use the Fill
option to complete the rest of the rows. Remember that you want to use cell references for the
information, not retype the same value. Row 13 will represent the first payment. The first
payment date is already shown in the above cells. It is in D7. Similarly, you should find cell
references for the Old Balance and Payment Amount. Remember, to differentiate these as cell
references rather than as labels, precede the cell reference with an = symbol, i.e. =D7 in cell A13.
The last three cells are
Interest Amount = Old Balance * monthly interest rate
Principal Amount = Payment Amount - Interest Amount
New Balance = Old Balance - Principal Amount
The toughest one to understand is the Interest Amount. We
have a cell that contains the yearly interest rate but not the
monthly interest rate. So all we need to do is divide the yearly
interest rate by 12. So now the equation becomes Old Balance *
Yearly Interest Amount / 12.
There are two types of cell addressing we can use - relative
addressing and absolute addressing. When we refer to a cell in
a formula that we do not want adjusted when doing a fill down
or a fill across, we need to make that reference an absolute
address reference. This is done by placing a $ before the
column and/or row designator. Most books show the $ before both the column and row
designators. In our case, it would be =B13 * $D$5/12. Now the reference to cell D5 will not be
adjusted when we do the fill down. The last three columns in the payment schedule are ready for
doing a fill down but not the first three columns since they are referencing items not in the
payment schedule rows.
The second row starts with adding 30 days to the previous date (=A13 + 30). The Old Balance on
the second row is just a reference to the New Balance on the first row. The Payment Amount is
the same as the last payment so that is simply =C13. Select D13:F13 and then do a fill down for
one row. The book indicates how to do fill downs. Now the second row is just about ready. I
suggest that you take care of any formatting before doing the fill down for the rest of the rows. If
any numbers representing dollar amounts in the first row do not look like currency, then use the
Home / Number section / General drop down box and select Currency. The second row numbers
representing dollar amounts should use the Number format. You can use the Home / Number
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Project 5 Lab Discussion
section area to choose formatting the selected cells as a Number format with comma separator
and 2 decimal places. Choose Number from the dropdown box. If the comma is missing from
the thousands position, click on the
places, then use one of the
icon. If the values in the cells do not have 2 decimal
icons to adjust the value to have 2 decimal places.
I request that you show
the payment date as
m/yyyy. Right now, it is
being shown as m/d/yyyy.
Select A13 and A14 and
use the Home / Number
section / General drop
down box and select More
Number Formats. This will
bring up the Format Cells
dialog box. Under the
Numbers tab you will find
a Custom selection. Click
on Custom and in the Type
text box, change the
m/d/yyyy to m/yyyy. Now
we are ready to fill down
all the payment rows.
Select A14:F14 only, and
then use the fill down until
you get to row Number of
Monthly Payments + 13 - 1
and in this example it would be 60 + 13 - 1 = 72 so we would do the fill down until row 72. Your
last row's New Balance should be 0.00. Do not worry if it is in red or in parentheses; these just
indicate that it is negative 0.00. Since Excel is using formulas some of the results are not even
pennies. If the last New Balance happened to be -0.003 this would round to -0.00 and get
indicated as negative.
If you see any cells that have all ######## across, this just means that your column width is not
wide enough to hold that value. Just widen the columns so all the data can be displayed clearly.
You can position your cursor at the end of the column in the Column Designator row at the top
of the spreadsheet and when it becomes a vertical line with pointers to the left and right, you can
drag the column width to be larger.
Now we need to finish off the formatting of the first worksheet before moving on to the second
worksheet. In row 2 I would like you to place a title that spans all the columns used by the data
in the worksheet; in our case that would be A2:F2. So, first type your title into A2. Once again
ignore if your title spills into the next column(s). After your title is there, select A2:F2 (you may
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need to deselect A2 by clicking in a
different cell and then select
A2:F2) and go to Home /
Alignment section / Merge &
Center. Use the Home / Font
section to set a larger font and a
style with more emphasis. When
you click OK you will see that no
matter where you click in row 2 in
the title cell, it is still just A2. Cells
B2, C2, D2, E2, and F2 are no
longer available.
Now that the data entry and the
formatting for the first worksheet is
done, we can copy it and place it
on Sheet2 so when can have two sets of loan data. Select A1:F14 and use the Home / Clipboard
section / Copy menu items to place the selected cells on the Clipboard. Click on the Sheet2 tab
and position yourself at A1. Use the Home / Clipboard section / Paste to paste the data from the
Clipboard to the second sheet. You will probably have to widen the columns since copy / paste
does not normally keep the column widths but goes back to the default column widths. One way
you can do this is to select Paste 'down button' and then Paste Special and choose Column
widths. The other way is to manually adjust the column widths.
The Project 5 specification shows a second set of loan data. Change the four entries on Sheet2 to
these second set of values. Also change the Title to reflect what this second loan is for. As soon
as you hit the Enter key after making a value change, most of the cells change to reflect that new
value. The second payment row is now set so all we need to do is use the fill down for the correct
number of rows for this loan.
The last two items you need to do is to rename the worksheet tab from Sheet1 and Sheet2 to
more meaningful names and delete the unused Sheet3. You must also use the Page Layout icon
to show the Header and Footer sections. You need to enter information into the Header and
Footer areas. Make sure that both worksheets have information in the Header and Footer
sections. Use the File / Print menu items to verify that everything looks good. Preview both
worksheets.
Remember to verify that your spreadsheets satisfy all the items in the project's rubric.
Spreadsheet techniques found in the Office 2013 book:
Changing a column width
EX 34
Inserting a formula in a cell
EX 73
Entering formulas
EX 20-21, 73-74, 76-78
Using absolute and relative addressing
http://office.microsoft.com/en-us/excel-help/switch-between-relativeabsolute-and-mixed-references-HP010342940.aspx
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Performing a fill down
EX 78-79
Changing number formatting
EX 32-33
Changing tab name on worksheet
EX 72
Centering and merging text across cells
EX 29-30
Custom number formatting
http://office.microsoft.com/en-us/excel-help/create-a-custom-number-formatHP010342372.aspx
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