Excel 2016

Creating More Complex Formulas

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You may have experience working with formulas that contain only one operator, such as **7+9**. More complex formulas can contain **several mathematical operators**, such as **5+2*8**. When there's more than one operation in a formula, the **order of operations** tells Excel which operation to calculate first. To write formulas that will give you the correct answer, you'll need to understand the order of operations.

Optional: Download our practice workbook.

Watch the video below to learn more about complex formulas.

Excel calculates formulas based on the following **order of operations**:

- Operations enclosed in
**parentheses** **Exponential**calculations (3^2, for example)**Multiplication**and**division**, whichever comes first**Addition**and**subtraction**, whichever comes first

A mnemonic that can help you remember the order is **PEMDAS**, or **P**lease **E**xcuse **M**y **D**ear **A**unt **S**ally.

Click the arrows in the slideshow below to learn how the order of operations is used to calculate formulas in Excel.

In the example below, we'll demonstrate how Excel uses the order of operations to solve a more complex formula. Here, we want to calculate the cost of **sales tax** for a catering invoice. To do this, we'll write our formula as **=(D3+D4+D5)*0.075** in cell **D6**. This formula will add the prices of our items, then multiply that value by the 7.5% tax rate (which is written as 0.075) to calculate the answer.

Excel follows the order of operations and first adds the values inside the parentheses: **(45.80+68.70+159.60) = 274.10**. It then multiplies that value by the tax rate: **274.10*0.075**. The result will show that the sales tax is **$20.56**.

It's especially important to follow the order of operations when creating a formula. Otherwise, Excel won't calculate the results accurately. In our example, if the **parentheses** are not included, the multiplication is calculated first and the result is incorrect. Parentheses are often the best way to define which calculations will be performed first in Excel.

In the example below, we'll use **cell references **along with **numerical values** to create a complex formula that will calculate the **subtotal** for a catering invoice. The formula will calculate the cost of each menu item first, then add these values.

- Select the
**cell**that will contain the formula. In our example, we'll select cell**C5**. - Enter your
**formula**. In our example, we'll type**=B3*C3+B4*C4**. This formula will follow the order of operations, first performing the multiplication:**2.79*35****= 97.65**and**2.29*20 = 45.80**. It then will add these values to calculate the total:**97.65+45.80**. - Double-check your formula for accuracy, then press
**Enter**on your keyboard. The formula will calculate and display the**result**. In our example, the result shows that the subtotal for the order is**$143.45**.

You can add **parentheses **to any equation to make it easier to read. While it won't change the result of the formula in this example, we could enclose the multiplication operations within parentheses to clarify that they will be calculated before the addition.

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.

For this challenge, you are going to work with another invoice like the one in our example. In the invoice, you will find the amount of tax for the order, the order's total, and the order's total if you were given a 10% discount.

- Open our practice workbook.
- Click the
**Challenge**worksheet tab in the bottom-left of the workbook. - In cell
**D7**, create a formula that calculates the tax for the invoice. Use a sales tax rate of**7.5%**. - In cell
**D8**, create a formula that finds the total for the order. In other words, this formula should add cells**D3:D7**. - In cell
**D9**create a formula that calculates the total after a**10%**discount. If you need help understanding how to take a percentage off of a total, check out our lesson on Discounts, Markdowns, and Sales. - When you're finished, your spreadsheet should look like this:

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