Sinking Fund Payment Calculator

About this calculator

A sinking fund is a reserve built up through regular periodic deposits so that a known future obligation — bond principal at maturity, equipment replacement, a balloon payment — can be paid off without a cash-flow shock when it comes due. The required deposit is found by solving the future value of an annuity formula for the payment: PMT = FV × i ÷ ((1 + i)^n − 1), where FV is the target amount, i is the rate per period, and n is the number of periods.

Companies use sinking funds tied to bond issues to reassure investors that redemption money is being set aside gradually rather than relying on refinancing at maturity, while municipalities and property managers use the same mechanism to fund long-term capital replacements like roofs or roads. This calculator takes your target future amount, the rate per period, and the number of periods to compute the periodic deposit required to reach it.