How to Create a Nested Formula in Excel (3 Easy Examples)

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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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.

Dataset to Create a Nested Formula in Excel


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")))

Using IF Function to Create a Nested Formula in Excel

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")

Applying IF, AVERAGE, MAX Fuctions to create a nested formula in Excel

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


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"))

Use of IF and AND Functions to create a nested formula

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.


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Afia

Afia

Hello, I am Afia Aziz Kona. I graduated in Naval Architecture and Marine Engineering from Bangladesh University of Engineering and Technology (BUET). I have an immense interest in technical writing and content development, therefore, I am working as a content developer at Exceldemy. In my spare time, I travel, watch movies, and cook different dishes.

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