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Unformatted text preview: ever, if the
amount of an obligation is its future value, the concept of sinking fund
OUTLINE Sinking Fund
A. Finding the Sinking Fund Deposit: The periodic payment A required to accumulate a
The periodic sum of F over n periods with interest charged at
the rate of i per period is
Formula: Applied Example: Sinking Fund
The proprietor of Carson Hardware has decided to set up a sinking fund for
the purpose of purchasing a truck in 2 years’ time.
purchasing It is expected that the truck will cost $30,000.
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- Spring '14