# Tools for the financial analyst

There are no financial functions in Excel to find the net future value of an investment. The good news however is the option of using tadXL add-in, a large library of financial functions including one to find net future worth. Here, me Abraham A. will take you on a guided tour to find the net future value using the tadNFV function.

### NFV in Excel

NFV is an acronym that stands for net future value of an investment and it is one of the tools used by an analyst to help find an investor's ROI - return on investment. The net future value is nothing more than the sum of compounded cash flows that results in a terminal value of an investment such as periodic deposits in uneven amounts. The Excel spreadsheet program has no NFV function of its own yet third party tools such as tadXL add-in for Excel 2007, 2010, and 2013 offer tadNFV function along with host of other financial functions. This function offers a bunch of features that are desired in NFV calculation such as use of different compounding frequencies, specification of periods of different lengths, and the mid-year discounting convention as opposed to the full-year discounting convention.

Before we proceed to find net future worth in Excel, you would need the tadXL add-in which is available for download here. There are different versions of this add-in i.e. v0.5, v1.0, v2.0 and v2.5 and you would have to select one of them for installation.

### Excel NFV function

The net future value Excel function requires the following values as input:
=tadNFV ( discount_rate, cash_flows, type, compounding, period, distribution )

 cash flows -100 50 40 30 10 rate 5% 5% 5% 5% 5% compounding 1 1 0.0833 0.0833 0 period 1 1 0.0833 0.0833 1 distribution 1 0.5 1 0.5 1 Net future value 23.0272 26.103 29.5321 29.7441 22.8088

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