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I assumed by "Fully compatible with Word and Excel formats" you meant it could actually edit Office documents and spreadsheets not just display them. So I went ahead and paid the 2.99 to upgrade from the free version and found that no it still will not save or edit files in .doc or .xls formats. It reads them but alas so did the free version. I suspect that you weren't paying much attention and actually were using and reviewed the 3.99 "Documents 2" program and mislabeled it as Documents, but I am not paying 3.99 to find out.