Excel can be used to

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**calculate**and**analyze**numerical information; however, you will need to know how to write**formulas**to maximize Excel's capabilities. A formula is an equation that performs a calculation using values in the worksheet. In this lesson you will learn how to**create simple formulas**using mathematical operators such as the addition, subtraction, multiplication, and division signs.### Simple Formulas

##### To Create a Simple Formula that Adds Two Numbers:

- Click the cell where the formula will be defined (C5, for example).
- Type the equal sign (=) to let Excel know a formula is being defined.
- Type the first number to be added (e.g., 1500)
- Type the
**addition sign (+)**to let Excel know that an add operation is to be performed. - Type the second number to be added (e.g., 200)
- Press
**Enter**or click the**Enter button**on the Formula bar to complete the formula.

##### To Create a Simple Formula that Adds the Contents of Two Cells:

- Click the cell where the answer will appear (C5, for example).
- Type the equal sign (=) to let Excel know a formula is being defined.
- Type the cell number that contains the first number to be added (C3, for example).
- Type the
**addition sign (+)**to let Excel know that an add operation is to be performed. - Type the cell address that contains the second number to be added (C4, for example).
- Press
**Enter**or click the**Enter button**on the Formula bar to complete the formula.

##### To Create a Simple Formula using the Point and Click Method:

- Click the cell where the answer will appear (C30, for example).
- Type the equal sign (=) to let Excel know a formula is being defined.
- Click on the
**first cell**to be included in the formula (C5, for example). - Type the
**subtraction sign (-)**to let Excel know that a subtraction operation is to be performed. - Click on the
**next cell**in the formula (C29, for example).

- Press
**Enter**or click the**Enter button**on the Formula bar to complete the formula.

##### To Create a Simple Formula that Multiplies the Contents of Two Cells:

- Select the cell where the answer will appear (E32, for example).
- Type the equal sign (=) to let Excel know a formula is being defined.
- Click on the
**first cell**to be included in the formula (C9, for example) or type a number. - Type the multiplication symbol (*) by pressing the Shift key and then the number 8 key. The operator displays in the cell and Formula bar.
- Click on the
**next cell**in the formula or type a number (12, for example). - Press
**Enter**or click the**Enter button**on the Formula bar to complete the formula.

##### To Create a Simple Formula that Divides One Cell by Another:

- Click the cell where the answer will appear.
- Type the equal sign (=) to let Excel know a formula is being defined.
- Click on the
**first cell**to be included in the formula. - Type a division symbol. The operator displays in the cell and Formula bar.
- Click on the
**next cell**in the formula. **Enter**or click the**Enter button**on the Formula bar to complete the formula.

### Using Cell References

As you can see, there are many ways to create a simple formula in Excel. Most likely you will choose one of the methods that enters the cell address into the formula, rather than an actual number. The cell address is basically the name of the cell and can be found in the Name Box.

The following example uses actual numbers in the formula in C5.

When a cell address is used as part of a formula, this is called a

**cell reference**. It is called a**cell reference**because instead of entering specific numbers into a formula, the cell address refers to a specific cell. The following example uses cell references in the formula in C30.
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