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Excel can be used to calculate numerical information. In this lesson, you will learn how to **create simple formulas** in Excel to add, subtract, multiply, and divide values in a workbook. You'll also learn the various ways you can use **cell references** to make working with formulas easier and more efficient.

A **formula** is an equation that performs a calculation. Like a calculator, Excel can execute formulas that add, subtract, multiply, and divide.

One of Excel's most useful features is its ability to calculate using a cell address to represent the value in a cell. This is called using a cell reference.

To maximize the capabilities of Excel, it is important to understand how to **create simple formulas **and** use cell references**.

Optional: You can download this example for extra practice.

Excel uses standard operators for equations, such as a **plus sign** for addition (+), **minus sign** for subtraction (-), **asterisk** for multiplication (*), **forward slash** for division (/), and **caret** (^) for exponents.

The key thing to remember when writing formulas for Excel is that all formulas must begin with an **equals sign** (=). This is because the cell contains—or is equal to—the formula and its value.

- Select the cell where the answer will appear
**(B4,**for example).Selecting cell B4 - Type the
**equals sign (=)**. - Type in the formula you want Excel to calculate (
**75/250**, for example).Entering formula in B4 - Press
**Enter**. The formula will be calculated, and the value will be displayed in the cell.Result in B4

If the result of a formula is too large to be displayed in a cell, it may appear as **pound signs** (#######) instead of a value. This means the column is not wide enough to display the cell content. Simply **increase the column width** to show the cell content.

When a formula contains a cell address, it is called a **cell reference**. Creating a formula with cell references is useful because you can update data in your worksheet without having to rewrite the values in the formula.

- Select the cell where the answer will appear (
**B3,**for example).Selecting cell B3 - Type the
**equals sign (=)**. - Type the cell address that contains the first number in the equation (
**B1,**for example).Entering a formula in B3 - Type the operator you need for your formula. For example, type the
**addition sign (+)**. - Type the cell address that contains the second number in the equation (
**B2,**for example).Entering a formula in B3 - Press
**Enter**. The formula will be calculated, and the value will be displayed in the cell.Result in B3

If you change a value in either B1 or B2, the total will automatically recalculate.

Result in B3

Excel **will not always tell you** if your formula contains an error, so it's up to you to check all of your formulas. To learn how to do this, you can read the Double-Check Your Formulas lesson from our Excel Formulas tutorial.

- Select the cell where the answer will appear (
**B4,**for example).Selecting cell B4 - Type the
**equals sign (=)**. - Click the
**first cell**to be included in the formula (**A3,**for example).Clicking cell A3 - Type the operator you need for the formula. For example, type the
**multiplication sign (*)**. - Click the
**next cell**in the formula (**B3,**for example).Clicking cell B3 - Press
**Enter**. The formula will be calculated, and the value will be displayed in the cell.Result in B4

- Click the cell you want to edit.
- Insert the cursor in the
**formula bar**, and edit the formula as desired. You can also**double-click the cell to view and edit the formula directly**from the cell. - When you're done, press
**Enter**or select the**Enter**command .Edit a formula - The new value will be displayed in the cell.Result

If you change your mind, use the **Cancel** command in the formula bar to avoid accidentally making changes to your formula.

- Open an
**existing Excel 2010 workbook**. If you want, you can use this example. - Write a simple
**division formula**. If you are using the example, write the formula in cell**B18**to calculate the painting cost per square foot. - Write a simple
**addition formula**using cell references. If you are using the example, write the formula in cell**F5**to calculate the total budget. - Write a simple
**subtraction formula**using the point-and-click method. If you are using the example, subtract the**Expand Bathroom**cost (C6) from the**Total**cost (C11). Calculate your answer in C12. - Edit a formula using the
**formula bar**.

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