The Mathematics of Money

218 Chapter 5 Spreadsheets

you may already know some yourself if you have used Excel before. As with formatting,

though, our goal here is only to introduce spreadsheets and use them as a calculation tool;

becoming a “power user” falls outside the scope of this book.

Classes or training sessions, whether for credit or not, are widely offered by many

colleges, adult education programs, and businesses, and you may want to consider taking

advantage of some of those offerings, since expertise with spreadsheets can be a valuable

skill for many different jobs.

EXERCISES 5.1

A. Creating a Basic Spreadsheet

Exercises 1 to 4 are based on the following situation: Some electric utilities offer their customers a “time-of-use” rate plan,

where the rate charged for electricity varies depending on the time of day. Often, a higher rate is charged for electricity used

during peak hours of the business day, when demand is high and power plants are struggling to produce enough, while a

lower rate is charged for off-peak use, when demand is lower than the power plants’ capacity.

Suppose that the Jamesboro Valley Municipal Electric Company offers such a plan to its business customers. Monday through

Friday, the peak rate is $0.1385 per kilowatt hour (kWh) and the off-peak rate is $0.0545 per kWh. On the weekend, the rate

is $0.0825 regardless of time of day. (It is not unusual to have a rate go beyond two decimal places, though the overall bill

would be rounded to the usual two.)

1. Create a spreadsheet to match the one shown below.

1 2 3 4 5 6

A B CD

AnyCorp Manufacturing Inc. 7/06 Electric Bill

Time of Use Kwh Used Rate Per Kwh

Weekday Peak 28595 0.1385

Weekday Off-Peak 14675 0.0545

Weekend 0.0825

Total

$3,960.41

$799.79

8503 $701.50

Totals 51773 N/A $5,461.70

2. Use the spreadsheet you created in Exercise 1 to fi nd the company’s total electric bill for August, in which it used
   35,642 weekday peak, 16,754 weekday off-peak, and 11,402 weekend kWh.


3. Use the spreadsheet you created in Exercise 1 to calculate the company’s total electric bill for September.
   In that month, it used 27,043 weekday peak, 12,998 weekday off-peak, and 9,017 weekend kWh. Also, in
   September, the electric company lowered its weekday peak rate to $0.1318 per kWh and raised its weekend rate to
   $0.0885 per kWh.


4. (This problem builds on Exercise 3.) Suppose that in September the electric company had also changed its rate
   structure, establishing peak and off-peak rates for the weekend as well. Suppose that the weekend peak rate is
   $0.0995 per kWh and the weekend off-peak rate is $0.0475 per kWh. AnyCorp’s total weekend use of 9,017 kWh in
   September was split between 4,003 peak kWh and 5,014 off-peak kWh. Calculate the company’s total electric bill
   for September.