When you listen to a financial report, you might hear a price such as 1 and five sixteenths 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.
- [Instructor] When you listen to a financial report,…you might hear a price such as 1 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.…I'll demonstrate how to use those functions.…My sample file is Convert_05_01…and you can find it in the Chapter05 folder…of your exercise files collection.…In the cell C4 and C5, I have the information I need…for a fractional value.…
So I have the fractional dollar value…of 1.07…and 16.…What that means is that I have $1 and 7/16.…I can convert that to a decimal value…by clicking in cell C6, then typing equal,…and we'll change it to dollarde.…So we're converting a dollar price,…expresses a fraction to a decimal.…Left parentheses, and then just the two arguments.…The fractional dollar amount comma,…and then the fraction,…the denominator,…that's in C5, press Enter.…
And we see that we get 1.4375.…Now let's say we have a decimal dollar value of 1.875…
- Recall what the type argument is used to determine when using the PMT function.
- Identify what the M stands for in the ACCRINTM function.
- Name the accounting rules used by the AMORDEGRC function to assign a depreciation coefficient to an asset.
- Recall what internal rate of return generated by the IRR function should be measured against to determine if it is a good investment.
- List the three regular intervals that coupon bonds pay interest at.
- Determine the function that provides a more conservative bond evaluation compared to the DURATION function.
- Explain what the RECEIVED function shows.
Skill Level Intermediate
1. Analyzing Loans, Payments, and Interest
2. Calculating Depreciation
3. Determining Values and Rates of Return
4. Calculating Bond Coupon Dates and Security Durations
5. Calculating Security Prices and Yields
6. Analyzing Simulation Results
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