### Understanding the Difference Between Formulas and Functions

In Excel, you can perform calculations by using formulas and functions:

*By using a formula.* A *formula* is a custom calculation that you create when none of Excel's functions (discussed next) does what you need. The word *formula* tends to sound imposing, but a formula can be a simple calculation; for example, to subtract 50 from 100, you can type `=100-50`

in a cell (the equal sign tells Excel you're starting a formula). Formulas can also be more complex, as you'll see later in this chapter.
*By using a function.* A *function* is a preset calculation that performs a standard calculation. For example, when you need to add several values together, you use the `SUM()`

function—for instance, `=SUM(A1:A6) ...`