Financial Functions perform common financial calculations, such as calculating the future value of an annuity at a given interest rate, straight-line depreciation, double-declining depreciation, or the payment term for a given investment. The financial functions in NExS cover annuities, cash flows, assets. bonds, and Treasury Bills.
Financial functions are most useful for solving cash flow calculations where you know all but one variable. For example, if you know the present value of an investment, interest rate, and periodic payment, you can use the @FV function to calculate the future value of the investment. If you know the future value and other variables, but need to know the present value, you can use the @PV function.
Many financial functions require specifying a Day Count Basis. A Day Count Basis indicates the way in which the days in a month and the days in a year are to be counted. Most of the financial functions in securities involve 4 different Day Count Basis: 30/360, actual/actual, actual/360 and actual/365.
30/360 Day Count Basis assumes 30-day months and 360-day years (12 months x 30 days). NExS also follows the ``End-of-Month'' rule which assumes that a security pays interest on the last day of the month and will always make its interest on the last day of the month. Special rules are followed when calculating the days between two dates on 30/360 Day Count Basis.
For example, let Start_Date = D1/M1/Y1, End_Date = D2/M2/Y2.
The special arguments used by NExS financial functions are defined in Table 7.1 Financial functions use the arguments defined in Table
Functions related fixed income securities usually require special dates as arguments: issue date, settlement date, first coupon date, last coupon date, maturity date of a security. When specified, the following constraints should be followed:
issue >
settlement >
maturity
issue >
first coupon >
maturity
issue >
last coupon >
maturity