Entering Finance Equations Into Excel Manually?

Dec 26, 2013

I am about to take a corporate finance course. The textbook uses a ton of basic (complex to me) equations to calculate interest rates, bond premiums, dividend reinvestment scenarios, etc.

I know that Excel has a bunch of specific functions to calculate interest, NPV, etc. but I am NOT interested in using those because I would like to have Excel "do the math" once I enter the formulas (or parts of formulas) correctly.

how to enter the equations below into Excel without using built-in formulas (I'm also not looking to use the Equation editor because I actually to calculate the answers, not just have the visual look/feel of the equation).

1R2 = [(1 + .0194)(1 + .03)]1/2 - 1

If done correctly, 1R2 in the above should equal 2.47%. I am totally fine doing parts of this in separate cells if necessary.

And something more complicated like the below. I wrote out the word "delta" because I don't know how to create the "triangle" symbol for delta on this forum post. According to the text, for securities with semiannual receipt (compounding) of interest, it is represented as:

-D = (delta P / P) / ((delta r sub b) / (1 + (r sub b)/2)))

Or in English, I believe that can be expressed as "negative D equals the quotient of delta P divided by P (in the numerator) divided by the following: delta r sub b divided by the quantity 1 plus r sub b divided by 2"

And finally

V sub b = 1000 / [1 + (.10/2)]2(4) + 50 times the following compound bracketed expression [1 - (1 / [1 + (.10/2)]2(4)] divided by (.10/2)]

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