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.
For example, suppose you want to contribute a certain amount of money each month to a sinking fund so that you have $10,000 by the end of one year to afford to buy a new car in cash. The following formula can help you determine how much you should contribute to the fund each month:
Required contribution = total * interest / ((1 + interest)periods-1)
where
  • total is the total amount you wish to accumulate.
  • interest is the interest rate you earn on your savings.
  • periods is the total number of periods you wish to make contributions in.
To calculate the required contribution for each period to accumulate a certain amount of money in a sinking fund, simply fill in the values below and then click the “Calculate” button.

Required Contribution each period: $741.41


Zach

Zach is the author behind Four Pillar Freedom, a blog that teaches you how to build wealth and gain freedom in life.

Zach's favorite free financial tool he's been using since 2015 to manage his net worth is Personal Capital. Each month he uses their free Investment Checkup tool and Retirement Planner to track his investments and ensure that he's on the fast track to financial freedom.

Although the bulk of his net worth is invested in index funds, his favorite place to invest in individual stocks is M1 Finance, a site that allows you to build a custom portfolio of stocks for free.

His favorite way to save money each month on his recurring bills is by using Trim, a free financial app that negotiates lower cable, internet, and phone bills with any provider on your behalf.

His favorite micro-investing app is Acorns, a free financial app that takes just 5 minutes to set up and allows you to invest your spare change in a diversified portfolio.

His favorite place to find new personal finance articles to read is Collecting Wisdom, a site that collects the best personal finance articles floating around the web on a daily basis.

Zach

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