2.What is compound formula? Give an example.
3.Distinguish between formulas and functions.
Answers
Answer:
2.The formula for compound interest is P (1 + r/n)^(nt), where P is the initial principal balance, r is the interest rate, n is the number of times interest is compounded per time period and t is the number of time periods.
Example: Let's say your goal is to end up with $10,000 in 5 years, and you can get an 8% interest rate on your savings, compounded monthly. Your calculation would be: P = 10000 / (1 + 0.08/12)(12×5) = $6712.10.
3.So in summary, a formula is any calculation in Excel, but a function is a pre-defined calculation. =MAX(A1:B20) is a formula containing a function. Mastering the use of functions in formulas is a key skill in learning financial modelling.
Answer:
Question:- What is compound formula? Give an example.
Answer:- Water is a compound because it is made up of more than one element - Hydrogen and Oxygen. For example, the chemical formula for water is H2O which indicates that 2 atoms of Hydrogen combines with 1 atom of oxygen and creates the compound water.
Question:- Distinguish between formulas and functions
Answer:- A formula is statement written by the user to be calculated. Formulas can be as simple or as complex as the user wants. A formula can contain values, references to cells, defined names, and functions. A function is a piece of code designed to calculate specific values and are used inside formulas.
hope this helps you ☺️