4.7 Financial Functions

**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 SpreadScript 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). SpreadScript 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.

- If D1=31, SpreadScript uses 30 for D1.
- If D2=31, SpreadScript uses 31, unless D1=30 or D1=31. In this case, SpreadScript uses 30.
- If D1 is the last day of Feburary (D1=28 or 29 in a leap year), SpreadScript uses 30 for D1.
- If D2 is the last day of Feburary (D2=28 or 29 in a leap year) and D1 is also the last day of Feburary, SpreadScript uses 30 for D2.

The special arguments used by SpreadScript financial functions are defined in Table 4.1 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:

`>`

settlement `>`

maturity
issue

`>`

first coupon `>`

maturity
issue

`>`

last coupon `>`

maturity

Grey Trout Software

02 March 2003