# Sinking Fund Calculator

URL: https://speedycalculator.com/calculators/finance/sinking-fund/
Last updated: 2026-10-25

> The sinking fund calculator works out the regular payment you need to set aside to accumulate a target amount by a deadline – for replacing equipment, repaying a bond or a big planned purchase.

## Inputs

- Money to accumulate
- Annual interest rate (%)
- Compounding frequency
- Period (years, months)
- Payment frequency

## Results

- Number of payments
- Sinking fund factor
- Required contribution
- Total contributions
- Interest earned

## Formula

```
Sinking fund factor = i ÷ [(1 + i)^n − 1]
Payment = target × sinking fund factor
i = rate per payment period, n = number of payments
```

## Explanation

A sinking fund spreads a large future cost into manageable regular payments. Companies use them to retire bonds; households use them for car replacement, holidays or home repairs.

### How to use the Sinking Fund Calculator

- **Money to accumulate**
- **Annual interest rate**
- **Compounding frequency**
- **Period**
- **Payment frequency**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter the target amount, the annual interest rate and compounding, the time period and how often you will pay in.

### Tips

- Use the nominal annual rate and pick the compounding frequency your bank or broker states.
- Small differences in return or fees compound into large differences over decades.
- Run the calculation with a cautious, a central and an optimistic return to see the range of outcomes.
- Past returns do not guarantee future returns – nothing here is investment advice.

### Common mistakes to avoid

- Comparing an APR with an APY or effective rate.
- Ignoring inflation, taxes and fees when judging a real return.
- Entering a percentage as a decimal (5 instead of 0.05 is correct here).

### Inputs explained

FieldWhat to enterMoney to accumulateAmount in your currencyAnnual interest rateIn %Compounding frequencyChoose one: Yearly, Semi-annually, Quarterly, Monthly …PeriodUnits: years, monthsPayment frequencyChoose one: Monthly, Bi-weekly, Weekly, Quarterly …

### What each result means

- **Number of payments** = round([Period]×[Payment frequency])
- **Sinking fund factor** = [Rate per payment]÷((1 + [Rate per payment])^[Number of payments] - 1)
- **Required contribution** = [Money to accumulate]×[Sinking fund factor]
- **Total contributions** = [Required contribution]×[Number of payments]
- **Interest earned** = [Money to accumulate] - [Total contributions]

### Example values

How the main result changes when **Money to accumulate** changes and everything else stays at the example values above:

Money to accumulateRequired contribution15,000226.2522,500339.3730,000452.537,500565.6245,000678.7460,000904.99

## Worked example

Inputs — Money to accumulate: $30,000; Annual interest rate: 4 %; Compounding frequency: Monthly; Period: 5 years; Payment frequency: Monthly.

Results — Number of payments = 60; Sinking fund factor = 0.015083; **Required contribution = $452.50**; Total contributions = $27,149.74; Interest earned = $2,850.26.

## FAQ

**What is a sinking fund?**
Money set aside regularly to pay for a known future expense.

**How is it different from an emergency fund?**
A sinking fund is for planned costs; an emergency fund is for surprises.

**Where should I keep a sinking fund?**
In a high-yield savings account or CD matching the time frame.

**What formula does the Sinking Fund Calculator use?**
Sinking fund factor = i ÷ [(1 + i)^n − 1].