Sinking Fund Payment Calculator
Find the level deposit needed to accumulate a target amount by a future date — the classic sinking-fund payment formula.
How it works
PMT = FV · i / [(1 + i)^n − 1] · i = annual rate ÷ m · n = years × m
A sinking fund sets aside equal deposits so a known future obligation — replacing equipment, redeeming a bond, funding a big purchase — is fully covered when it comes due. This is the inverse of the future-value-of-an-annuity formula: instead of asking what deposits grow into, it asks what deposit reaches a chosen target. Interest earned along the way means the total you deposit is less than the goal.
Worked example
To have $50,000 in 10 years at 5% with monthly deposits (0.5% monthly, 120 deposits): PMT = 50,000 · 0.005 / [1.005^120 − 1] = 250 / 0.81940 = $321.20 per month. You deposit $38,544 in total and interest supplies the remaining $11,456.
Sources: Sinking fund — Wikipedia
Frequently asked questions
What is a sinking fund used for?
It is money set aside on a schedule to meet a future obligation — replacing a roof or vehicle, funding a bond redemption, or saving for a large planned expense — so the full amount is ready exactly when needed.
How is this different from a savings-goal calculator?
The math is the same annuity formula; a sinking fund framing emphasizes a fixed future liability and a fixed date. Higher interest or more frequent compounding lowers the required deposit.
Why is my total deposited less than the target?
Because the deposits earn interest as they sit in the fund. That growth covers the gap between what you contribute and the final target, which is the whole point of investing the fund rather than holding cash.
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Educational financial-math tool, not investment or financial advice.