Excel formula
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$47:BA47,0.01))^12-1,"n/a") |
Excel formula
"MAK" wrote:
What is the following formula trying to do? What do the functions mean, and the ^ symbol? The "^" (caret) operator is exponentiation. x^y is x raised to the power y; that is x multiplied by itself y times. The expression (1+IRR(...))^12-1 is attempting to annualize a monthly IRR. The problem is: Excel IRR() does not always return a valid number. ISNUMBER(...) is attempting to detect that. So the IF() expression says: if IRR() returns a valid number, return the annualized IRR; otherwise, return the string "n/a". FYI, the IF() expression is unnecessarily complicated. At a minimum, it should be rewritten: =IF(ISNUMBER(IRR($F$47:BA47,0.01)), (1+IRR($F$47:BA47,0.01))^12-1, "n/a") ----- original message ----- "MAK" wrote: What is the following formula trying to do? What do the functions mean, and the ^ symbol? =IF(ISNUMBER((1+IRR($F$47:BA47,0.01))^12-1),(1+IRR($F$47:BA47,0.01))^12-1,"n/a") |
Excel formula
The ^ symbol is the exponentiation operator, or raising a number to a power.
If IRR is the rate of return for 1 month, (1+IRR)^12-1 [or POWER(1+IRR,12)-1] will be the rate of return for 1 year if the return is compounded monthly. IRR, ISNUMBER, and IF are all standard Excel functions, details of which are included in Excel help. -- David Biddulph "MAK" wrote in message ... What is the following formula trying to do? What do the functions mean, and the ^ symbol? =IF(ISNUMBER((1+IRR($F$47:BA47,0.01))^12-1),(1+IRR($F$47:BA47,0.01))^12-1,"n/a") |
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