# Chapter 2. Work with Formulas and Functions

Excel provides you with tools for storing numbers and other kinds of information. However, the real power of Excel comes from manipulating all this information. You can use formulas and functions to calculate in Excel.

The more than 300 functions built into Excel enable you to perform tasks of every kind, from adding numbers to calculating the internal rate of return for an investment. You can think of a function as a black box. You put your information into the box, and out come the results you want. You do not need to know any obscure algorithms to use functions.

Each bit of information you provide is called an argument. Excel’s Function Wizard provides guidance for every argument for every function. A formula consists of an equal sign, one or more functions, their arguments, operators such as the division and multiplication symbols, and any other values required to get your results.

Many Excel functions do special-purpose financial, statistical, engineering, and mathematical calculations. The Function Wizard arranges functions in categories for easy access. The Payment (`PMT`) function in the Financial category, for example, enables you to determine an optimal loan payment for a given principal, interest rate, and length of loan.

This chapter introduces useful techniques for making formulas and functions even easier, including the Function Wizard and the Excel calculator. You can also find tips for working more efficiently with functions ...

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