Financial Calculators

Sinking Fund Calculator

The sinking fund calculator helps you to determine how much you need to put aside in order for you to achieve your goal within the specified time.

Sinking Fund Calculator

Rate compounding frequency

Table of contents

What is a Sinking Fund?
Sinking fund formula

What is a Sinking Fund?

A sinking funds is a fund where a company can put the money from now on in order to make it easier to repay their debts. Most companies use a debt sinking fund to manage their debt.
If you have a bond sinking fund, it may help to reduce the final amount that you pay. By making regular payments, and letting the interest do the rest, the company will pay less at maturity.

Sinking fund formula

Based on the sinking fund definition in the previous section, it may be viewed as finding a value of a regular series of payments that will give enough interest to finally achieve your goal.
To fulfill this sinking fund definition find your contribution you will need:
PeriodThink of the time period you would like to contribute. Bond sinking funds may refer to the time period between today and the maturity of your bond.
Money to accumulate the amount that you want to receive at the end of your period. It could be the entire principal of the bond or a fraction of it.
The annual rate corresponds to your compounding frequency. If you have a 6% annual interest rate and your monthly compounding frequency is 0.5%. But don't worry! The sinking fund calculator will automatically calculate that amount for you. Just enter your annual interest rates into the tool.
Rate compound frequency how often the interest will be paid;
You are now ready to utilize this sinking funds calculator! In its advanced Mode, the USSF – Uniform Series Sinking Fund Factor may be found. This is the factor that multiplies the amount of money you have accumulated to get the result.
Contribution = Money to accumulate * (interest / ((interest + 1)^compound frequency * period  - 1))

Parmis Kazemi
Article author
Parmis Kazemi
Parmis is a content creator who has a passion for writing and creating new things. She is also highly interested in tech and enjoys learning new things.

Sinking Fund Calculator English
Published: Tue Jun 14 2022
In category Financial calculators
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