Formulas that refer back to their own cells - From Excel97 help file 15/03/2002

When a formula refers to its own cell, either directly or indirectly, it is called a circular reference. To calculate such a formula, Microsoft Excel must calculate each cell involved in the circular reference once by using the results of the previous iteration. Unless you change the default settings for iteration, Microsoft Excel stops calculating after 100 iterations or after all values in the circular reference change by less than 0.001 between iterations, whichever comes first.

Microsoft Excel cannot resolve formulas with circular references by using normal calculation. When you make a circular reference, a message will warn you that a circular reference has occurred. If the circular reference is accidental, click OK. The Circular Reference toolbar displays, and tracer arrows point to each cell that is referenced by the circular reference. You can use the Circular Reference toolbar to move through each cell in the reference so that you can redesign the formulas or logic to break the circular reference. (Some scientific and engineering formulas require circular references.)

Since some formulas require a circular reference, you may need to change the number of iterations. To change the number of iterations, click Options on the Tools menu, and then click the Calculation tab. Select the Iteration check box, and then indicate the maximum number of iterations and degree of change you want Microsoft Excel to use.