Understanding Excel Functions:

To build powerful and useful formulas, you often need to include one or more Excel functions as operands. You need to understand the advantages of using functions, you need to know the basic structure of every function, and you need to review Excel’s function types.

Functions: A function is a predefined formula that performs a specific task. For example, the SUM function calculates the total of a list of numbers, and the PMT (payment) function calculates a loan or mortgage payment. You can use functions on their own, preceded by the equal sign, or as part of a larger formula.

Function Advantages: Functions are designed to take you beyond the basic arithmetic and comparison formulas by offering two main advantages. First, functions make simple but cumbersome formulas easier to use.

For example, calculating a loan payment requires a complex formula, but Excel’s PMT function makes this easy. Second, functions enable you to include complex mathematical expressions in your worksheets that otherwise would be difficult or impossible to construct using simple arithmetic operators.

Function Structure: Every worksheet function has the same basic structure: NAME(Argument1, Argument2, …). The NAME part identifies the function. In worksheet formulas and custom PivotTable formulas, the function name always appears in uppercase letters: PMT, SUM, AVERAGE, and so on.

The items that appear within the parentheses are the functions’ arguments. The arguments are the inputs that functions use to perform calculations. For example, the function SUM(A1,B2,C3) adds the values in cells A1, B2, and C3.