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Sinking Fund Factor Calculator

Find out how much to set aside each year to reach a future savings goal using the sinking fund factor. Enter an interest rate and number of years to get the factor, and add a target amount to auto-calculate the yearly deposit.

Input

%
yr
$

Enter a target to also calculate the yearly deposit (target × factor).

Result

Sinking fund factor (3% rate, 20 yr)

0.037216

Sinking fund factor

0.037216

Future value annuity factor (reciprocal)

26.870374

Yearly deposit

$3,721.57

To have $100,000.00 after 20 years, you would deposit about $3,721.57 each year while earning 3% interest.

How it works

  • The sinking fund factor tells you how much to deposit each year to reach a future target: yearly deposit = target amount × sinking fund factor.
  • The formula is: sinking fund factor = r ÷ ((1+r)^n − 1), where r is the interest rate as a decimal (for example, 3% is 0.03) and n is the number of years you save.
  • When the rate is 0%, no interest accrues, so the factor becomes 1 ÷ n, simply splitting the target evenly across the years.
  • The sinking fund factor is the reciprocal of the future value annuity factor. Multiplying the future value annuity factor (the future value of saving 1 unit per year for n years) by the sinking fund factor gives 1.
  • This tool assumes an ordinary annuity: one deposit at the end of each year, compounded once a year at the given rate. Monthly deposits or beginning-of-period payments will give different results.
  • Taxes, fees, and inflation are not considered. Actual returns vary, so treat the results as a rough estimate only.