Share Parentheses in a Formula to Calculate a Percentage Rate of Increase

Share Parentheses in a Formula to Calculate a Percentage Rate of Increase

T In the Long-Term Analysis sheet, using the formula rate = amount of increase/base, insert a formula in cell C6 that will calculate the percentage by which advertising spending increased from the year 2015 to 2016. Copy the formula from cell C6 to the range D6:F6.

The Correct Answer and Explanation is :

To calculate the percentage rate of increase in advertising spending from the year 2015 to 2016 using the formula:

[
\text{Rate of Increase} = \frac{\text{Amount of Increase}}{\text{Base}} \times 100
]

Formula for Cell C6:

Assuming:

• 2015 advertising spending is in cell B6
• 2016 advertising spending is in cell C5

The amount of increase is calculated as:

[
\text{Amount of Increase} = \text{2016 Spending (C5)} – \text{2015 Spending (B5)}
]

The base is the 2015 spending (B5).

So, the formula in cell C6 should be:

=((C5 - B5) / B5) * 100

This calculates the percentage rate of increase from 2015 to 2016. The result will be expressed as a percentage.

Steps:

1. Insert the formula =((C5 - B5) / B5) * 100 in cell C6.
2. Copy the formula from cell C6 to the range D6:F6, ensuring the correct columns are referenced for each pair of years.

Explanation:

1. Why Parentheses are Used: Parentheses ensure the operations are performed in the correct order. The subtraction (C5 - B5) calculates the increase first. Dividing by B5 calculates the proportion of the increase relative to the base year (2015). Multiplying by 100 converts the proportion into a percentage.
2. Replicating the Formula: Copying the formula to cells D6:F6 automatically adjusts the column references due to Excel’s relative referencing. For example:

• In D6, the formula will become =((D5 - C5) / C5) * 100, calculating the percentage increase from 2016 to 2017.

1. Error Handling: Ensure that the base (e.g., B5, C5, etc.) is not zero, as division by zero will result in an error.

This approach enables you to calculate and track the rate of increase across multiple years, ensuring accurate long-term analysis of advertising spending trends.