If you want to **create a nested formula in Excel**, you have come to the right place. Here, we will walk you through 3 easy examples to do the task smoothly.

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## Download Practice Workbook

You can download the **Excel file** and practice while you are reading this article.

## What Is Nested Formula?

When a function stays inside another function and acts as one of the arguments; then it is called a **nested formula**. **Nested formulas** are useful to avoid step-by-step calculations, and it is helpful to make calculations in one step rather than making a number of calculations to get to our expected answer.

## 3 Examples to Create Nested Formula in Excel

In the following dataset, you can see the **Name** and **Score** columns. Using this dataset, we will go through** 3 **easy examples to **create a nested formula in Excel**. Here, we used **Microsoft Excel 365**. You can use any available Excel version.

### 1. Using IF Function to Create Nested Formula in Excel

In this method, we will use **the IF function** as an argument inside of an **IF** function to **create a nested formula in Excel**. After that, using the nested formula, we will find out the **Grade** of the following dataset.

**Steps:**

- First, we will type the following formula in cell
**D5**.

`=IF(C5>80,"A+",IF(C5>70,"A",IF(C5>60,"C")))`

**Formula Breakdown**

**IF(C5>80,”A+”,IF(C5>70,”A”,IF(C5>60,”C”)))**→ the**IF**function makes a logical comparison between a given value and the value we expect. Here, I used nested**IF****IF(C5>60,”C”)**→ returns “**C**” when**C5>60**.**IF(C5>70,”A”)**→ returns “**A**” when**C5>70**.**IF(C5>80,”A+”)**→ returns “**A+**” when**C5>80**.**IF(C5>80,”A+”,IF(C5>70,”A”,IF(C5>60,”C”)))**→ becomes**Output: C**

**Explanation:**Since the condition**C5>60**is true, the**IF**function returns “**C**”.

- After that, press
**ENTER**.

Then, you can see the result in cell **D5**.

- Furthermore, we will frag down the formula with the
**Fill Handle Tool**.

As a result, you can see the complete **Grade **column.

**Read More:** **How to Create a Custom Formula in Excel (A Step-by-Step Guideline)**

### 2. Use of IF, AVERAGE, and MAX Functions

In the following dataset, we can see the **Name**,** Sales in 2020**, **Sales in 2021**, and** Deserve Bonus?** columns. Next, using the **IF**, **AVERAGE**, and **MAX** functions, we will **create a nested formula** to find out whether the person in the** Name** column deserves a bonus or not.

**Steps:**

- In the beginning, we will type the following formula in cell
**E5**.

`=IF(AVERAGE(C5:D5)>=(AVERAGE(MAX($C$5:$C$11),MAX($D$5:$D$11))*0.75),"Yes","No")`

**Formula Breakdown**

**MAX($C$5:$C$11)**→ The**MAX**function returns the maximum value in a range of cells.**Output: $150,000**

**MAX($D$5:$D$11)) →**becomes**Output: $180,000**

**AVERAGE(MAX($C$5:$C$11),MAX($D$5:$D$11) →**The**AVERAGE**function returns the average of the values of cells.**AVERAGE**(**$150,000,$180,000)**→ becomes**Output: $165,000**

**AVERAGE(MAX($C$5:$C$11),MAX($D$5:$D$11))*0.75 →**multiplies**$165,000**by**75**.**Output: $123750**

**AVERAGE(C5:D5)**→ becomes**Output: $130,000**

**IF(AVERAGE(C5:D5)>=(AVERAGE(MAX($C$5:$C$11),MAX($D$5:$D$11))*0.75),”Yes”,”No”)**→ The**IF**function makes a logical comparison between a given value and the value we expect.**IF**(**$130,000>= $165,000,”Yes”,”No”)**→ becomes**Output: Yes**

**Explanation:**Since the logical argument of the**IF**function is true, it returns “**Yes**“.

- Afterward, press
**ENTER**.

Therefore, you can see the result in cell **E5**.

- Moreover, we will frag down the formula with the
**Fill Handle Tool**.

Hence, you can see the complete **Deserve Bonus?** column.

**Read More:** **How to Create a Complex Formula in Excel (with Easy Steps)**

**Similar Readings**

**How to Create a Formula in Excel without Using a Function (6 Approaches)****Create an Excel Formula to Subtract (10 Examples)****How to Apply Formula to Entire Column Using Excel VBA****Create a Formula with Structured References in Excel****How to Create a Formula in Excel for Multiple Cells (9 Methods)**

### 3. Applying IF and AND Functions to Create Nested Formula in Excel

In this method, we will apply the **IF** and **AND** functions to **create a nested formula in excel**. After that, using the formula we will find out the **Ratings** in the following dataset.

**Steps:**

First of all, we will type the following formula in cell **D5**.

`=IF(AND(C5="A+"),"Excellent",IF(AND(C5="A"),"Good","Poor"))`

**Formula Breakdown**

**AND(C5=”A”),”Good”,”Poor”) →**The**AND**function determines whether all conditions in a logical statement are true or not.**IF(AND(C5=”A+”),”Excellent”,IF(AND(C5=”A”),”Good”,”Poor”))****→**the**IF**function makes a logical comparison between a given value and the value we expect.**Output: Excellent**

**Explanation:**Since**C5=A+**, the formula returns “**Excellent**”.

- At this point, press
**ENTER.**

Therefore, you can see the result in cell **D5**.

- In addition, we will drag down the formula with the
**Fill Handle tool**.

Hence, you can see the complete **Ratings **column.

**Read More:** **How to Apply Formula to Entire Column Without Dragging in Excel**

## Practice Section

You can download the above** Excel **file to practice the explained method.

## Conclusion

Here, we tried to show you** 3 **examples to** create a nested formula** **Excel**. Thank you for reading this article, we hope this was helpful. If you have any queries or suggestions, please let us know in the comment section below. Please visit our website **Exceldemy** to explore more.