Analyzing real estate investments? Making book depreciation calculations? Microsoft Excel can help. Excel's SLN, or straight-line depreciation, function lets you easily calculate standard straight-line depreciation amounts. And Excel's SYD, or sum-of-the-years-digits, function lets you easily calculate standard sum of the year's digits depreciation.
Excel provides handy depreciation functions for making straight-line depreciation calculations (which are typically used for real estate depreciation) and for making sum-of-the-years-digits depreciation calculations (which may be used for book depreciation.). As you might expect, both are straight-forward to use and easy to understand.
Straight-line Depreciation calculations with the SLN function
The SLN function calculates straight-line balance depreciation for an asset given the cost, its salvage value, and its estimated economic life. The DDB function uses the following syntax:
SLN (cost, salvage, life)
Suppose, for example, that you must calculate the straight-line depreciation for equipment that costs $50,000, lasts five years, will have a salvage value of $10,000 at the end of the fifth year. To calculate the depreciation for the first year, you use the following formula:
=SLN (50000,10000,5)
The function returns the value 8000.00. To calculate the depreciation for the second year, you use the same formula because straight-line depreciation is the same for each year period.
Sum-of-the-Years-Digits Depreciation calculations with the SYD function
The SYD function calculates sum-of-the-years-digits depreciation for an asset given the cost, its salvage value, estimated economic life, and the accounting period for which depreciation is being calculated. The SYD function uses the following syntax:
SYD (cost, salvage, life, period)
Suppose, for example, that you must calculate the sum-of-the-years-digits depreciation for equipment that costs $50,000, lasts five years, and will have a salvage value of $10,000 at the end of the fifth year. To calculate the depreciation for the first year, use the following formula:
=SYD (50000,10000,5,1)
The function returns the value 13333.33. To calculate the depreciation for the second year, you use the formula
=SYD (50000,10000,5,2)
Mastering Accrued Interest Calculations with Microsoft Excel
Microsoft Excel is not just a spreadsheet program; it's a powerful tool for financial calculations, including the computation of accrued interest for various securities. Excel's built-in functions, ACCRINT and ACCRINTM, are specifically designed to simplify the process of calculating accrued interest for securities that pay periodic interest and those that pay at maturity, respectively. This article delves into the nuances of these functions, providing a detailed guide on how to use them effectively, along with common pitfalls to avoid.Using the Bond Duration Add-in Functions
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Making internal rate of return or net present value calculations with Microsoft Excel? Make sure you aren't unnecessarily limiting your options. In addition to the well-know IRR and NPV financial functions, Microsoft Excel also supplies two powerful add-in functions, XIRR and XNPV, that can expand your analytical possibilities.