Financial Calculation Software, a Snap with MS Excel

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There is more to Microsoft Excel than simple math. It has more than 50 functions that can be set up, in effect allowing you to do a certain degree of programming. This article explains how to create and use a financial calculator in Excel, and discusses some of those functions.

Microsoft Excel is a number cruncher par excellance. Lotus 1-2-3 was also a great program that did crunch numbers very efficiently, but that has largely diappeared due to Microsoft's established position and relentless innovations (in MS Excel 2002 you can still open Lotus 1-2-3 files). In spite of a large number of quality financial products in the market, MS Excel continues to hold a preeminent position. It's main competitors are OpenOffice.org Calc, StarOffice and Corel Quattro Pro according to wikipedia.

MS Excel has a large number of built-in functions covering a wide area from manipulating strings to statistical calculations and everything in between. The financial functions built into MS Excel have a large user base that includes banks, insurance, investment, real estate and continues on to an endless list. If you are looking to work in a finance related business, learning to work with financial calculations with MS Excel is a must, as it is the major spread sheet product. In effect, this tutorial will teach you a little about programming in Excel, as well as discuss its functions.

Financial Functions

There are over 50 financial functions available in MS Excel (this tutorial uses Excel 2002), however to have access to all these functions you may have to use the Analysis ToolPak add-in from tools. For this tutorial I will be describing in detail how to access a financial function, what the function calculates, how to implement the function, and so on. In particular we will be looking at a very familiar calculation that most of us would have come across while buying a car, or getting a loan from a bank to buy a property.

Next: Calculating the payment on a loan >>
 

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