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# Lesson Three: Recurrence Formulas

A recurrence (also known as recursion) formula is one that refers to cells based on their relationships with other cells using keywords such as

**[THIS], [PREV], [NEXT], [FIRST]**and

**[LAST]**.

Here's an example:

**Quarter[THIS] = Quarter[PREV]*1.2**. This formula says: "This quarter equals the previous quarter multiplied by 1.2".

New users commonly ask: "If there isn't a specific cell reference, how does Quantrix know to which cell "

**[THIS]**" is referring?" The answer: [THIS] is a moving target. When the formula is computing Quarter2, [THIS] is Quarter2 and [PREV] is Quarter1. When computing Quarter3, [THIS] is Quarter3 and [PREV] is Quarter2. The next Illustration has an example recurring formula.

**Assume that car sales will be the same each quarter.**

Goal of Formula:

Goal of Formula:

**Describe in Real Language:**This quarter equals the previous quarter. Do not include Total or YTD.

**Quarter[THIS]=Quarter[PREV]skip YTD, Total**

Formula:

Formula:

It is likely that a growth rate factor needs to be incorporated into the formula. Taking that into consideration:

**Assume that car sales will grow by 20% each quarter.**

Goal of Formula:

Goal of Formula:

**Describe in Real Language:**This quarter equals the previous quarter multiplied by 1.2. Do not include Total or YTD.

**Quarter[THIS]=Quarter[PREV] * 1.2 skip YTD, Total**

Formula:

Formula:

Before going back to your model, take a minute to describe the goal and write out the formula you need on a piece of paper, as per the above example. Assume a quarterly product growth rate of 1.2, do not include Total or YTD.

Now return to the Sales Projection matrix in your Widgets file. Use the following steps to write a formula that assumes a monthly growth rate of 1.2 for all products.

**Step 1.**Add formula field #3 to the Formula Editor.

- Click on formula 2 (it will turn blue) and hit ENTER. You could also use the "Insert Formula" button in the tool bar at the top of the screen.

**Step 2.**Activate the formula field.

- Double-click next to the "3." in the Formula Editor.

**Step 3.**Enter the formula.

- Enter the formula, either by typing it in or by clicking on the Formula Bar items to add them to the formula. Hit ENTER.

**Step 4.**Format the result.

- To format the number of decimals, use Format > Numbers in the menu bar or the format decimals button in the toolbar.

**Step 5.**Save your model.

- Click

**File > Save.**