If you ’ ve been using Excel to build financial models for any...

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If you’ve been using Excel to build financial models for any period of time, you’ve probably come across the issue of circular references in debt calculations. Here are a couple of ways of dealing with them:
1. Get around it mathematically e.g. create a working line (not always possible or accurate)
2. Calculate interest on prior period balance (not very accurate)
3. Hard-code interest amount and create macro to recalculate
4. Enable iterative calculations
Circularity in Debt Calculations is covered in detail in the FMI Level 1 Exam Prep Online training course.




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