Sinking Fund Calculator
Find the monthly contribution needed to reach a savings target by a future date.
Assumptions used in this calculation
- Contribution timing: Assumes equal monthly contributions made at the end of each month (an ordinary annuity), with no starting balance.
- Return assumption: Uses a constant expected annual return compounded monthly, if you're saving for a near-term, capital-guaranteed goal, a lower and safer rate than typical equity returns is more realistic.
About this calculator
A sinking fund is how businesses and disciplined individuals plan for a large, known future expense, equipment replacement, a balloon tax bill, a planned purchase, without scrambling to find the full amount at once, but working out the required monthly contribution that actually reaches the target while earning interest along the way isn't as simple as dividing the target by the number of months. This calculator applies the ordinary annuity sinking-fund formula, PMT = FV × i ÷ ((1 + i)ⁿ − 1), to your target amount, months until needed, and expected annual return, solving for the exact monthly contribution required assuming each deposit also earns return until the target date. Because it accounts for compounding, the required monthly contribution comes out lower than a naive target-divided-by-months estimate, letting you fund the goal with smaller monthly outlays.
Worked example
₹5,00,000 in 24 months at 6%
Result: ₹19,660/month
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