Anyone that uses a spreadsheet will find this PowerTip helpful.  When opening a spreadsheet you created at an earlier time, or getting a spreadsheet that someone else created, it is often difficult to understand the formula.  That is because most formulas are created using cell addresses, which can be very difficult to decipher.  Using cell names and range names can greatly improve the readability of your spreadsheet; for you, or anyone else that uses your spreadsheet.

This example uses the simple formula for finding compound interest, which is:

Which of these spreadsheet formulas is easier to comprehend?

Example 1:

Example 2:

I think you will have to agree, that Example 2 is much easier to recognize, and closely resembles the actual formula.  When combined with a spreadsheet layout as shown below in Table 1, with all the terms labeled, it is easy to understand and follow.

Table 1:

You can create cell, or range names, easily if your spreadsheet contains column, or row labels.  For example we select the row containing P (our label) and $100.00.  Then choose Insert, Name, Create.  The Create Names dialog box will appear, prompting you for the location of the name within your selection.  In this example Excel detected the text label P at the left of our selection.  Click OK.  Repeat that step for i, t and n.  (For n, select the range including the label n, and the four cells under it.)  Now when you create your formula, you can refer to the variables P, i, n and t when creating your formula to solve for A, instead of their cell address.