In example 5 we used sinking fund calculations to determine the amount of. As such, the bond issuer is required to contribute a certain amount of money to the sinking fund each period and the formula to. Click on the calculate button to generate the results. Sinking fund is defined as the repayment fund obtained by setting aside revenue over a period of time to fund a future capital expense or repayment of a longterm debt. It is widely used in negotiations with debentures, where, the issuer, if case, is obliged to create a sinking fund to pay, at maturity due, the holders. Brush up on the stuff for your next or current job with this howto. Sinking fund formula calculator excel template educba.
Sinking fund calculator free online math calculator and. To calculate the size of the sinking fund, one can use the formula. Sinking fund formula how to calculate sinking fund. How to calculate future value for a sinking fund in ms. Use this calculator to determine the payment required to accumulate a specified amount by the end of a given period of time at a given interest rate. This sinking fund calculator provides a computation of the amount of money you will need to contribute to a sinking fund for each given period to reach a savings target. Sinking fund refers to a fund that is set up by the particular bond issuer in order to repurchase a definite portion of the bond issue or for the replenishment of a major asset or any other similar capital expenditure.
Sinking fund formula shows you how to calculate sking fund. Ordinary simple annuity sinking fund calculations and constructing a. Input the accumulate amount, interest rate and payment period to calculate the required payment. Furthermore, at the end of every period, the calculation of interest takes place.
In a very simple language, sinking fund is a type of fund which is set up for repayment of debt. This tool helps you to have stress free budgeting, avoid credit card debt and spend large planned sums of money without feeling guilty. Sinking fund calculator payment required to reach specified value. The discount rate is the same for all payment periods. Sinking fund calculator calculates the payment required to reach a specified amount. This sinking fund calculator provides a computation of the amount of money you will need to contribute to a sinking fund for. Sinking fund calculator payment required to reach specified. Sinking fund formula how to calculate sinking fund examples. A sinking fund is an account containing money set aside to pay off a debt or bond. Suppose that an account has an annual rate of compounded times per year, so that is the interest rate per compounding. So instead of paying the whole principal amount at the expiry of the bond, the borrower will pay off his debt in installments. Sinking fund formula table of contents sinking fund formula.
You can calculate a sinking fund payment plan in five simple steps. It can also be used to set aside money for purposes of replacing capital equipment as it becomes obsolete, or major maintenance or renewal of elements. Make sure you read directions carefully to use and edit this template. Sinking fund calculation is done by using annuity method which takes a little long time. Read this stepbystep guide to sinking funds for the answers to all your questions. You can print as many of these sinking fund detail sheets as you need. Sinking fund calculator a sinking fund is a fund formed by setting aside a certain amount of money periodically so that you have enough to pay for some large expense in the future. Wonderhowto as you might guess, one of the domains in which microsoft excel really excels is business math. Note that the effect of this method of calculation is that the interest rate has the. Introduction to the formaul for sinking funds with an example. Regular savings sinking fund the future value has been decided and you. A sinking fund method is a technique for depreciating an asset in bookkeeping records while generating money to purchase a.
Your town has a small free community swimming pool. Although no expert and i would definitely recommend testing this on your own, ive found that if i scale the print job to 85%, the resulting print out fits a classic happy planner i have the punch. Calculate the gross domestic product in billions of nominal dollars. As a result, the annual payment to the sinking fund is then increased by x. Sinking fund calculator sinking fund formula online calculator. Examples of sinking fund formula with excel template sinking fund formula calculator. Sinking funds are the best way to save small amount each month for a designated purpose. Each payment is made at the end of a payment period.
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