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A conditional function, such as the IF, is used when you have two options, like either Pass or Fail in an exam. When you have more than two options, like if an exam can have several different grading categories (Fail, Pass, Merit, Distinction), then you will need more that one conditional function, and they are nested. So the second conditional function is checking another possibility.

As a general rule, you always need one less condition than the amount of options. So when there are two possibilities, you need one condition. If it is not the first option, then there is only one possible option left so it not necessary to check for the second option. If it is not pass, it must be fail so there is no need to carry out a second check to see if it is a fail. So if it is just pass or fail, and your mark is in A3, then you need one IF as follows:

=IF(A3>=40%,"Pass","Fail")

You are using a process of elimination. If you had four options, then you'd only need to check for three conditions, and if it is not one of the first three, then it has to be the fourth. Note too, that you don't have to check the lower and upper boundary, as the previous condition will have eliminated it.

=IF(A3>=80%,"Distinction", IF(A3>=60%,"Merit", IF(A3>=40%, "Pass","Fail")))

In the above, for the Merit we don't have to check if is equal 60% or more and also check if it is less than 80%, as the first condition has already checked for figures of 80% or more, so anything now of 60% or more, has to be less than 80%. Note the 3 brackets at the end, because there are 3 IFs and they are nested.

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