You can enter a fractional number in a cell and use it for calculation:
Enter "0 1/5" in a cell (without the quotation marks) and press the input key. In the input line above the spreadsheet you will see the value 0.2, which is used for the calculation.
If you enter “0 1/2” AutoCorrect causes the three characters 1, / and 2 to be replaced by a single character, ½. The same applies to 1/4 and 3/4. This replacement is defined in Tools - AutoCorrect - AutoCorrect Options - Options tab.
If you want to see multi-digit fractions such as "1/10", you must change the cell format to the multi-digit fraction view. Open the context menu of the cell, and choose Format cells. Select "Fraction" from the Category field, and then select "-1234 10/81". You can then enter fractions such as 12/31 or 12/32 - the fractions are, however, automatically reduced, so that in the last example you would see 3/8.