Finance

Sinking Fund Calculator

Find the regular deposit needed to reach a future sum, like a replacement fund.

The deposit per period is the regular amount to set aside each period, and the total deposited is the sum of all those deposits over the full term.

Formula

Deposit per period equals future amount times the periodic rate, divided by one plus the periodic rate to the power of periods, minus one.

How it works

A sinking fund sets money aside gradually for a known future cost — replacing equipment, a roof, or a bond repayment — instead of borrowing at the last minute.

Worked example

For example, aiming for $50,000 over 10 years at 5% with 12 deposits per year gives a periodic rate of 0.0041667 and 120 periods, so $50,000 × 0.0041667 ÷ ((1 + 0.0041667) to the power of 120 − 1) = $321.99 per period, and the total deposited over 120 periods is $38,639.31.

FAQs

How is it different from a savings goal?
It is the same math, framed for a planned future liability rather than a personal goal.

What if deposits are yearly?
Set deposits per year to 1 and the result is the annual deposit.

Why include interest?
The fund itself earns interest while it builds.

Are these figures financial advice?
No — they are estimates for planning only, not financial advice. Check with a qualified adviser for decisions involving large sums.

Estimates only, not financial advice. Figures are approximate and do not include all fees, taxes, or changing rates unless stated.

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