A sinking fund is a disciplined way to save for a known future expense — replacing equipment, repaying a bond, funding a major purchase — by setting aside a fixed amount every period instead of scrambling to find the full amount when the bill comes due. This calculator solves the core sinking fund formula in both directions and shows how the balance grows over time.

How the Sinking Fund Calculator works

The calculator uses the standard ordinary-annuity sinking fund formula, PMT = FV·r/((1+r)^n − 1), where r is the per-period interest rate and n is the number of periods. It assumes payments are made at the end of each period and that the interest rate is constant for the entire horizon — the same assumptions behind a standard savings or amortization schedule.

The Future Value tab rearranges the same formula to answer the opposite question: given a fixed payment, rate, and number of periods, how much will the fund be worth? The Schedule tab uses the Payment tab's inputs to chart the balance growing period by period, so you can see how much of the final total comes from your own contributions versus compounding interest.

Inputs and what they mean

Savings goal (future value) is the dollar amount you need by the target date — a bond's face value, a piece of equipment's replacement cost, or any known future obligation. Annual interest rate is the return you expect the fund to earn, entered as an annual percentage; the calculator converts it to a per-period rate based on the chosen frequency. Number of periods is the total count of contribution periods until the target date (e.g. 60 for 5 years of monthly contributions). Payment frequency determines whether the rate and periods are treated as monthly or annual.

Limits and edge cases

This calculator assumes a constant contribution and a constant interest rate for the entire horizon — real-world sinking funds sometimes step up contributions over time or earn a variable rate, which this simple model does not capture. At a 0% rate, the formula gracefully falls back to a straight-line payment (goal divided by the number of periods), since there's no interest to do part of the work. The result is a planning estimate, not a guarantee — actual investment returns vary, and a large enough shortfall in realized returns will require a larger contribution than originally calculated.