I know it is used as an absolute cell reference but I don't know why.

Please help

Thanks

If you have a column of figures and you want to mutliply each by the number to is left and divide by the value of a fixed cell, you write in the top cell a formula like =B2*A2/$A$1
You can then copy the formula to all the other cells in the column, the B2 and A2 items will be translated to B3 and A3 etc, but the $A$1 won't change.

They "Why" is because originally the DOS version of Lotus 1-2-3 , the ORIGINAL extremely hot spreadsheet (I said hot, not the absolute first - that was VisiCalc), did it that way - and for ease of use sake, Excel carried that over into their product - Excel for MAC OS, followed by Excel 2.0 for Windows (1.0 was MAC, 2.0 Windows). Later on Excel was rolled into Microsoft Office.