Introduction to Excel, Chapter 2

Scripted Lecture

Vista Credit Union

This semester you have been awarded an assistantship with the Vista Credit Union (VCU). In this
role, you will be assisting Rob Wakefield, the credit union’s loan manager. Rob has given you an
Excel workbook dealing with the following loan data: loan number, house cost, down payment,
mortgage rate, and the length of the loan in years. Using this workbook, you are to verify that the
workbook correctly calculates the amount financed, the periodic interest rate, the total number of
payment periods, the percent of the house cost that is financed, and the payoff year for each loan.
In addition, you will calculate some summary statistics.

Hands-On Exercise 1: Formula Basics

You are to use a workbook containing data for five mortgages financed with the Vista Credit
Union. The data include house cost, down payment, mortgage rate, number of years to pay off the
mortgage, and the financing date for each mortgage.
Steps:
1. Use relative cell referencing
a. Open e02_script_data and save it as e02_script_VCU_LastFirst
b. On the Details worksheet, type = in cell D7 and click cell B7.
c. Type – and click cell C7 and press Ctrl + Enter
d. Double-click the fill handle.
e. Click in each cell in the range D7:D11, so students can see how the cell references
change in the formula bar.
2. Use absolute cell referencing
a. Type =E7/B5 in cell F7.
b. Double-click the fill handle so students can see the resulting errors and then click
Undo.
c. Click in front of B5 in the formula bar and press F4.
d. Once again, double-click the fill handle.
e. Click cell F11 so students can see that the numerator, which uses a relative address
has changed, but the denominator, which uses an absolute address remains the
same.
3. Use mixed cell referencing
a. Type =G7*B5 in cell H7 and press F4 Double-click the fill handle.
b. Click cell H8 so students can see that the factor on the left has changed to G8 but
the factor on the right remains $B$5 and the cell value is 240 months.
 c. Click Undo and in front of B5 in the formula bar, press F4, which changes the
reference to B$5 a mixed cell reference
d. Double-click the fill handle to see that the number of payments is the same using
an absolute address.
e. Save changes.
Hands-On Exercise 2: Function Basics
The Vista Credit Union’s worksheet contains an area for summary statistics. In addition to
providing the statistics, you will include today’s date and identify the year in which each
mortgage will be paid off.
Steps:
1. Use the SUM function
a. be sure the Details worksheet is active.
b. Click cell B15 and click Sum.
c. Select the range B7:B11 and click ENTER.
2. Use the AVERAGE function
a. Click the FORMULAS tab. Click cell B16, and click the Sum arrow and select
Average.
b. Select the range B7:B11 and click ENTER.
3. Use the MEDIAN function
a. Click cell B17, and click Insert Function, type median in the Search for a
function box, and click Go.
b. With MEDIAN highlighted in the Select a function box, click OK.
c. Click the collapse button to the right of the Number1 box and select the range
B7:B11 and click OK.
4. Use the MIN, MAX, and COUNT functions
a. Click cell B18, and click the Sum arrow and select Min.
b. Select the range B7:B11 and click ENTER.
c. Click cell B19, and click the Sum arrow and select Max.
d. Select the range B7:B11 and click ENTER.
e. Click cell B20, and type =COUNT(B7:B11).
f. Select the range B15:B20 and drag the fill handle to the right by two columns.
g. Click cell B11 and type a new value 410000.
5. Use the TODAY and YEAR functions
a. Click cell B4, and click the Date & Time arrow, click TODAY, and click OK.
b. Click cell K7, click Date & Time, if necessary, scroll down the list, and select
YEAR.
c. Click cell J7 to enter it in the Serial_number box. Click OK. Point out to students
that the payoff year is the same as the year in which the loan was financed, and this
is incorrect.
 d. Edit the formula in cell K7 by typing +G7 at the end of the formula.
e. This result is still not correct. Click the Number Format arrow on the HOME tab
and then select Number. Decrease the number of decimal places to show the value
as a whole number.
f. Double-click the fill handle.
g. Save changes.
Hands-On Exercise 3: Logical, Lookup, and Financial Functions
Rob wants you to complete another model that he can use for future mortgage data analysis. As
you study the model, you see you need to incorporate logical, lookup, and financial functions.
Steps:
1. Use the VLOOKUP function
a. Click the Payment Information worksheet tab.
b. Click cell G10, click Lookup & Reference on the FORMULAS tab, choose
VLOOKUP, and in the Function Arguments dialog box, perform the following:
in Lookup_value, click cell F10
in Table_array, select the range D4:E6 and press F4
in Col_index_num, type 2
in Range-lookup, type False
click OK
c. Double-click the fill handle.
2. Use the PMT Function
a. Click cell H10, click Financial, scroll down and click PMT, and in the Function
Arguments dialog box, perform the following:
in Rate, type G10/B5 and press F4
in Nper, type F10*$B$5
in Pv, type –D10
b. Click OK. Double-click the fill handle.
3 Use the IF Function
a. Click cell I10, click Logical, click IF, and in the Function Arguments dialog box,
perform the following:
in Logical_test, type E10>=$B$7
in Value_if_true, type 0
in Value_if_false, type D10*$B$6/$B$5
b. Click OK. Double-click the fill handle.
c. Save changes. If Hands-On Exercise 4 will not be immediately demonstrated, close
the workbook.
Hands-On Exercise 4: Range Names
You are going to simplify the VLOOKUP function by using a range name for the APR rates
lookup table instead of the actual cell references. After creating a range name, you will modify
some range names Rob created and create a list of range names.
Steps:
1. Create a Range Name
a. be sure the Payment Information worksheet is active.
b. Select the range D4:E6.
c. Type InterestRates in the Name box.
2. Edit and Delete Range Names
a. Click Name Manager on the FORMULAS tab.
b. Change AvgCost range name to AverageCost
c. Delete the InputArea range name. Close the Name Manager box.
3. Use a Range Name in a Formula
a. Click cell G10 and click Insert Function.
b. Type InterestRates in the Table_array box and click OK.
c. Copy the revised formula down the column.
4. Insert a List of Range Names
a. Create a new worksheet named Named Ranges
b. Type Named Ranges in cell A1 and bold it.
c. Type Locations in cell B1 and bold it.
d. Click cell A2, click Use in Formula from the FORMULAS tab, and select Paste
Names. Click Paste List.
e. Increase columns A and B to accommodate the data.
f. Save and close the workbook.