Sinking Fund Calculator - Four Pillar Freedom

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.

Total Amount to Accumulate ($) Interest Rate (%) Contribution Periods

Required Contribution each period: $741.41

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Zach

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

He quit his day job as a data scientist in 2019 because he was able to earn enough income from profitable websites to replace his salary. He now teaches people how to start and grow their own profitable websites from scratch in the Income Community.

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.

His favorite investment platform is M1 Finance, a site that allows him to build a custom portfolio of stocks for free, has no trading or maintenance fees, and even allows him to set up automated target-allocated investments.

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