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2045412-Excel Part2

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0% found this document useful (0 votes)
57 views26 pages

2045412-Excel Part2

part 2

Uploaded by

hem
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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INTRODUCTION

TO EXCEL FOR
DATA ANALYTICS
TOPIC: STATISTICAL AND
MATHEMATICAL FUNCTIONS IN
EXCEL
Indexes

Statistical Functions 3

Mathematical Functions 11

Financial Functions 21
Statistical Functions
Microsoft Excel is popularly used for several purposes, including
conducting mathematical computations. Functions in Excel are
widely used in statistics along with statistical functions.

Statistical functions are primarily used to mathematically


process a specified set of cells in a worksheet. For example, to
add values occupying a large group of cells, you need to use the
SUM function.

Functions are more extensively used than formulas when a


mathematical process is applied to a group of cells. Using
formulas to add values, the location of every cell must be added
one at a time to the formula. It is time-consuming, especially
when the values of multiple cell locations need to be added. This
is where statistical functions come to play.

The main purpose of a statistical function is to execute statistical,


logical, and mathematical operations using specific values in a
particular order. Numerous statistical functions, principles, and
algorithms are used for analyzing raw data, constructing
statistical models, and much more.

Some very useful statistical functions in Excel:


Average Function
The average is defined as the mean value which is equal to the
ratio of the sum of the number of a given set of values to the total
number of values present in the set.

Formula: Average = Sum of Values/ Number of values


To calculate the average of a group of numbers, use the
AVERAGE function.

Average If Function
To average cells based on one criteria, use the AVERAGEIF
function. For example, to calculate the average excluding zeros.

Median Function
Generally median represents the mid-value of the given set of
data when arranged in a particular order.

Given that the data collection is arranged in ascending or


descending order. The median for grouped data can be
calculated using the formula,
Let us take a look at the Formula of the "MEDIAN" Function.

To find the median (or middle number), use the MEDIAN


function.

Mode Function
The most frequent number occurring in the data set is known as
the mode. We can calculate the mode for grouped data using the
below formula:

To find the most frequently occurring number, use the MODE


function.
Standard Deviation

The standard deviation is based on the entire population using


the STDEV.P function in Excel and how to estimate the standard
deviation based on a sample using the STDEV.S function in Excel.
What is Standard Deviation?

A standard deviation is a number that tells you how far numbers


are from their mean.

1. For example, the numbers below have a mean (average) of 10.

Explanation: the numbers are all the same which means there's
no variation. As a result, the numbers have a standard deviation
of zero.

The STDEV function is an old function. Microsoft Excel


recommends using the new STEDV.S function which produces
the exact same result.
2. The numbers below also have a mean (average) of 10.

Explanation: the numbers are close to the mean. As a result, the


numbers have a low standard deviation.

3. The numbers below also have a mean (average) of 10.

Explanation: the numbers are spread out. As a result, the


numbers have a high standard deviation.
STDEV.P Function
The STDEV.P function (the P stands for Population) in Excel
calculates the standard deviation based on the entire population.

For example, you're teaching a group of 5 students. You have the


test scores of all students. The entire population consists of 5 data
points.

The STDEV.P function uses the following formula:

You can look at the Final result after applying the STDEV.P
Function on the Cells A1:A5.
STDEV.S Function
The STDEV.S function (the S stands for Sample) in Excel
estimates the standard deviation based on a sample.

For example, you're teaching a large group of students. You only


have the test scores of 5 students. The sample size equals 5.

The STDEV.S function uses the following formula:

Note: why do we divide by n - 1 instead of by n when we estimate


the standard deviation based on a sample? Bessel's correction
states that dividing by n-1 instead of by n gives a better estimation
of the standard deviation.
Min Function
To find the minimum value, use the MIN function.

Max Function
To find the maximum value, use the MAX function.

Large Function
To find the third largest number, use the LARGE function.
Small Function
To find the second smallest number, use the following SMALL
function.

Check Result:

Mathematical Functions
The Excel Math Functions perform many of the common
mathematical calculations, including basic arithmetic,
conditional sums & products, exponents & logarithms, and
trigonometric ratios.

The Mathematical Functions in Excel are widely used across


almost all of the Industries, and are very useful for day-to-day
activities and work.

The Mathematical Functions such as SUM, SUMIF, COUNT,


COUNTIF, SQRT, ROUND etc are very popular.
SUM Function
The Excel SUM function adds together a supplied set of numbers
and returns the sum of these values.

The syntax of the function is:


SUM( number1, [number2], ... )

Excel Sum Function Examples


The following spreadsheet shows three simple examples of the
Excel Sum function:

The above examples show that each argument to the Sum


function can be supplied as a single value or cell reference, or as
an array of values or cells.

SUMIF Function
To sum cells based on one criteria (for example, greater than 9)
,
use the following SUMIF function (two arguments).

You can check out the Result of the SUMIF Function on the next
page.
To sum cells based on one criteria (for example, green), use the
following SUMIF function (three arguments, the last argument is
the range to sum).

SUMIFS Function
To sum cells based on multiple criteria (for example, circle and
red), use the following SUMIFS function (first argument is the
range to sum).
General note: in a similar way, you can use the AVERAGEIF
function to average cells based on one criteria and the
AVERAGEIFS function to average cells based on multiple criteria.

COUNT Function
To count the number of cells that contain numbers, use the
COUNT function.

You can look at the Example given below, Where we are trying to
Count the total no. of Rows/Items present in the Spreadsheet.
COUNTIF Function
To count cells based on one criteria (for example, greater than 9),
use the following COUNTIF function.

COUNTIFS Function
To count rows based on multiple criteria (for example, green and
greater than 9), use the following COUNTIFS function.
SQRT Function
Function Description
The Excel Sqrt function calculates the positive square root of a
supplied number.

The syntax of the function is:


SQRT( number )

Excel Sqrt Function Examples


The following spreadsheet shows three simple examples of the
Excel Sqrt function.

CEILING Function
The Excel Ceiling function rounds a supplied number away
from zero, to the nearest multiple of a given number.

The syntax of the function is:


CEILING( number, significance )

Ceiling Function Examples


In column B of the following spreadsheet, the Excel Ceiling
function is used to round the positive and negative numbers
22.25 and -22.25 to different significance values.
FLOOR Function
Function Description
The Excel FLOOR function rounds a supplied number towards
zero to the nearest multiple of a specified significance.

The syntax of the function is:


FLOOR( number, significance )

Floor Function Examples


In column B of the following spreadsheet, the Excel Floor
function is used to round the positive and negative numbers
26.75 and -26.75 to different multiples of significance.

Take a look at the Floor Function Examples on the Next Page.


Floor Function Examples

INT Function
Function Description
The Excel Int function truncates a supplied number down to the
closest integer.

The syntax of the function is:


INT( number )

Excel Int Function Examples


The following spreadsheets show the Excel Int function applied
to different numbers:
INT Function Examples

ROUND Function
Function Description
The Excel Round function rounds a supplied number up or
down, to a specified number of decimal places.

The syntax of the function is:


ROUND( number, num_digits )

Excel Round Function Examples


Column B of the following spreadsheet shows several examples
of the Excel Round function:
ROUND Function Examples

RAND Function
Function Description
The Excel Rand function generates a random real number
between 0 and 1.

The function takes no arguments and therefore, its syntax is:


RAND( )

Although the number generated is between 0 and 1, you can use


the function to generate a random real number between any
two supplied limits a and b, using the formula:
=a + (b-a) * RAND( )
Examples of this are provided below.
In the following spreadsheet, the Excel Rand function is used to
generate random numbers between different limits.

Financial Functions
To illustrate Excel's most popular financial functions, we
consider a loan with monthly payments,

An annual interest rate of 6%, a 20-year duration, a present value


of $150,000 (amount borrowed) and a future value of 0 (that's
what you hope to achieve when you pay off a loan).

We make monthly payments,


so we use 6%/12 = 0.5% for Rate and
20*12 = 240 for Nper (total number of periods).

If we make annual payments on the same loan, we use 6% for


Rate and 20 for Nper.
PMT Function
The Excel PMT function is a financial function that returns the
periodic payment for a loan. You can use the PMT function to
figure out payments for a loan, given the loan amount, number
of periods, and interest rate.

Select cell A2 and insert the PMT function.

Note: the last two arguments are optional.

For loans, Future Value can be omitted (the future value of a loan
equals 0, however, it's included here for clarification). If Type is
omitted, it is assumed that payments are due at the end of the
period.

Result. The monthly payment equals $1,074.65.


Tip: when working with financial functions in Excel, always ask
yourself the question, am I making a payment (negative) or am I
receiving money (positive)?

We pay off a loan of $150,000 (positive, we received that amount)


and we make monthly payments of $1,074.65 (negative, we pay).

RATE Function
The Excel RATE function is a financial function that returns the
interest rate per period of an annuity. You can use RATE to
calculate the periodic interest rate, then multiply as required to
derive the annual interest rate. The RATE function calculates by
iteration.

If Rate is the only unknown variable, we can use the RATE


function to calculate the interest rate.

NPER Function
The Excel NPER function is a financial function that returns the
number of periods for a loan or investment.

You can use the NPER function to get the number of payment
periods for a loan, given the amount, the interest rate, and
periodic payment amount.
Or the NPER function. If we make monthly payments of
$1,074.65 on a 20-year loan, with an annual interest rate of 6%, it
takes 240 months to pay off this loan.

We already knew this, but we can change the monthly payment


now to see how this affects the total number of periods.

Conclusion: if we make monthly payments of $2,074.65, it takes


less than 90 months to pay off this loan.

PV Function
The Excel PV function is a financial function that returns the
present value of an investment. You can use the PV function to
get the value in today's dollars of a series of future payments,
assuming periodic, constant payments and a constant interest
rate.

Or the PV (Present Value) function. If we make monthly


payments of $1,074.65 on a 20-year loan, with an annual interest
rate of 6%, how much can we borrow? You already know the
answer.
Let's take a look at the Result of the PV Function.

FV Function
The Excel FV function is a financial function that returns the
future value of an investment. You can use the FV function to
get the future value of an investment assuming periodic,
constant payments with a constant interest rate.

And we finish this chapter with the FV (Future Value) function.


If we make monthly payments of $1,074.65 on a 20-year loan,
with an annual interest rate of 6%, do we pay off this loan?
The answer is Yes.

But, if we make monthly payments of only $1,000.00, we still


have debt after 20 years.
“All our dreams can come
true, if we have the
courage to pursue them.”

By Walt Disney

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