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Sinking Fund Calculator

Sinking Fund Calculator is part of Toolspire and is ready as soon as this page loads. At 0% the deposit is just the target split by the years. ₹1,000 in 5 years with no interest is ₹200 a year. Interest lowers the deposit you must add.

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What you can do here

Year-end deposits

The formula assumes each deposit arrives at the end of the year and then has the remaining years to earn.

A zero-rate identity

No interest means an even split. That is the check that the page is not sneaking in a return.

One target, one rate

The target does not step up, and the rate does not change halfway through.

The sequence

How to use the Sinking Fund Calculator

  1. 1

    Type the amount you need on the final day

    Include the whole target. Do not subtract what you have already saved unless you reduce the target yourself.

  2. 2

    Keep the rate annual

    8 means 8% a year. Do not type a monthly rate.

  3. 3

    Compare with a zero rate

    Run 0% once. The deposit should be the target divided by the years. Anything else is a bug, not a feature.

Worth knowing

  • Sinking Fund Calculator on Toolspire: with interest, the deposit is target × r ÷ ((1 + r)^years − 1), paid at each year end.
  • At 0%, the deposit is target ÷ years. ₹1,000 over 5 years is ₹200.
  • The deposits are yearly, not monthly. A monthly SIP is a different formula.
  • A higher rate cuts the deposit, because interest does more of the work.

A sinking fund is the reverse of compound growth

Compound interest starts from a deposit and walks forward. A sinking fund starts from the pile you need and walks backward to the equal year-end payment that reaches it. At a zero rate that payment is the target divided by the years. With interest, each earlier deposit has fewer years of growth than a lump sum placed today, which is why the payment is larger than target ÷ (1+r)^years. Tax and a missed year are not in the figure.

FAQ

Questions about Sinking Fund Calculator

Where does Sinking Fund Calculator run?

Sinking Fund Calculator runs in this tab on Toolspire. What you type or drop in is not sent to us and is not stored on a server.

What yearly deposit builds ₹1,000 in 5 years at 0%?

₹200. With no interest the target is simply split into five equal deposits.

Why is this not the SIP calculator?

A SIP here would be monthly. This page deposits once each year, at the end of the year.

Does a higher rate mean I save less?

Yes. The target stays put, so more growth means a smaller deposit from you.

When is the deposit made?

At the end of each year. A deposit on 1 January would earn a full extra year and needs a different formula.

Keep going

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