Excel formula

  • Thread starter Thread starter MAK
  • Start date Start date
M

MAK

What is the following formula trying to do? What do the functions mean, and
the ^ symbol?

=IF(ISNUMBER((1+IRR($F$47:BA47,0.01))^12-1),(1+IRR($F$47:BA47,0.01))^12-1,"n/a")
 
MAK said:
What is the following formula trying to do?
What do the functions mean, and the ^ symbol?
Click to expand...

The "^" (caret) operator is exponentiation. x^y is x raised to the power y;
that is x multiplied by itself y times.

The expression (1+IRR(...))^12-1 is attempting to annualize a monthly IRR.

The problem is: Excel IRR() does not always return a valid number.
ISNUMBER(...) is attempting to detect that.

So the IF() expression says: if IRR() returns a valid number, return the
annualized IRR; otherwise, return the string "n/a".

FYI, the IF() expression is unnecessarily complicated. At a minimum, it
should be rewritten:

=IF(ISNUMBER(IRR($F$47:BA47,0.01)), (1+IRR($F$47:BA47,0.01))^12-1, "n/a")


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