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In this course, author Curt Frye shows how to perform a wide range of financial calculations quickly and easily using the many financial functions found in Excel 2010. The course details dozens of functions for evaluating cash flows; calculating depreciation; determining rates of return, bond coupon dates, and security durations; and more.
When you listen to a financial report, you might hear a price such as 1 and 5/16 or 1.3125. Those two statements actually represent the same value. The trick is to convert between decimal notation and fractional notation. In Excel, you can do that by using the DOLLARDE and DOLLARFR functions. You read a fractional dollar amount by putting the part to the right of the decimal point of the dollar value over a fraction which has to be named separately. So, for example the value that I have in C4 is 1.05.
So, that's 1 and 5 something and then in cell C5, we see that we have the value 16. So, we are looking for the value 1 and 5/16. Now, if we want to convert that value to decimal, all we need to do is create a formula using the DOLLARDE function. So, I have clicked in cell C7, then I will type an equal sign, and then type DOLLARDE( and then we have our fractional dollar, which is in cell c4, a roma, and then the fraction and in fact this is the denominator, the number that goes under the line when you write a fraction. That's in cell c5.
Type a right parenthesis. Everything is good and press Enter and we see that the decimal value is 1.3125. Now, let's do the same thing in reverse, converting a decimal number to a fractional number. So, here we have our decimal number of 1.375 and the fraction we will have the denominator of 16. So, I will click in cell C15, type equal, and then it's DOLLARFR( and then the first argument is the decimal dollar value, that's in c12, comma, and then the fraction which again is the denominator, the number underneath the line when you write a fraction.
That's in cell c13. Type a right parenthesis to close out the function and then press Tab so I don't scroll down. And we see that the fractional value is 1.06 and because we know that the fraction is 16 that means it's 1 and 6/16 or 1 and 3/8. Now to demonstrate what happens when you change the fraction value, let's click in cell C13 and change the value there from 16 to 32. When we do and press Enter, we see that the value in C15 changes to 1.12.
So, when we doubled the value in cell C13, the value to the right of the decimal point in C15 doubled as well. It went from 1.06 to 1.12. So, we are looking at a value of 1 and 12/32 which also reduces down to 1 and 3/8.
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