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Annual Sinking Fund using Sinking Fund Method Formula

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Annual Sinking Fund is an account containing money set aside to pay off a debt or bond in a year. Check FAQs

S a = \frac{I r}{{(1 + I r)}^{x} - 1}

S_a - Annual Sinking Fund?I_r - Rate of Interest?x - Life of Asset in Years?

Annual Sinking Fund using Sinking Fund Method Example

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Here is how the Annual Sinking Fund using Sinking Fund Method equation looks like with Values.

Here is how the Annual Sinking Fund using Sinking Fund Method equation looks like with Units.

Here is how the Annual Sinking Fund using Sinking Fund Method equation looks like.

0.0833 = \frac{10}{{(1 + 10)}^{2} - 1}

0.0833 = \frac{10}{{(1 + 10)}^{2} - 1}

0.0833 = \frac{10}{{(1 + 10)}^{2} - 1}

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Annual Sinking Fund using Sinking Fund Method Solution

Follow our step by step solution on how to calculate Annual Sinking Fund using Sinking Fund Method?

FIRST Step Consider the formula

S a = \frac{I r}{{(1 + I r)}^{x} - 1}

Next Step Substitute values of Variables

∴

S a = \frac{10}{{(1 + 10)}^{2} - 1}

Next Step Prepare to Evaluate

∴

S a = \frac{10}{{(1 + 10)}^{2} - 1}

Next Step Evaluate

∴

S a = 0.0833333333333333

LAST Step Rounding Answer

∴

S a = 0.0833

Annual Sinking Fund using Sinking Fund Method Formula Elements

Variables

Annual Sinking Fund

Annual Sinking Fund is an account containing money set aside to pay off a debt or bond in a year.

Symbol: S_a

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Annual Sinking Fund

Rate of Interest

The Rate of Interest is the percent of principal amount charged for the due period.

Symbol: I_r

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Rate of Interest

Life of Asset in Years

Life of Asset in Years is the number of years the asset is expected to be used in its lifespan.

Symbol: x

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Life of Asset in Years

Other formulas in Valuation Engineering category

Go Sinking Fund for Buildings

S = \frac{I a}{I c}

Go Annual Installment given Sinking Fund

I a = I c \cdot S

Go Coefficient of Annual Sinking Fund

I c = \frac{I r}{{(1 + I r)}^{T} - 1}

Go Coefficient of Annual Sinking Fund given Sinking Fund

I c = \frac{I a}{S}

How to Evaluate Annual Sinking Fund using Sinking Fund Method?

Annual Sinking Fund using Sinking Fund Method evaluator uses Annual Sinking Fund = Rate of Interest/((1+Rate of Interest)^Life of Asset in Years-1) to evaluate the Annual Sinking Fund, The Annual Sinking Fund using Sinking Fund Method formula is defined as an account containing money set aside to pay off a debt or bond. A company that issues debt will need to pay that debt off in the future, and the sinking fund helps to soften the hardship of a large outlay of revenue. Annual Sinking Fund is denoted by S_a symbol.

How to evaluate Annual Sinking Fund using Sinking Fund Method using this online evaluator? To use this online evaluator for Annual Sinking Fund using Sinking Fund Method, enter Rate of Interest (I_r) & Life of Asset in Years (x) and hit the calculate button.

FAQs on Annual Sinking Fund using Sinking Fund Method

What is the formula to find Annual Sinking Fund using Sinking Fund Method?

The formula of Annual Sinking Fund using Sinking Fund Method is expressed as Annual Sinking Fund = Rate of Interest/((1+Rate of Interest)^Life of Asset in Years-1). Here is an example- 0.083333 = 10/((1+10)^2-1).

How to calculate Annual Sinking Fund using Sinking Fund Method?

With Rate of Interest (I_r) & Life of Asset in Years (x) we can find Annual Sinking Fund using Sinking Fund Method using the formula - Annual Sinking Fund = Rate of Interest/((1+Rate of Interest)^Life of Asset in Years-1).

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Annual Sinking Fund using Sinking Fund Method Formula

Annual Sinking Fund using Sinking Fund Method Example

Annual Sinking Fund using Sinking Fund Method Solution

Annual Sinking Fund using Sinking Fund Method Formula Elements

Other formulas in Valuation Engineering category

How to Evaluate Annual Sinking Fund using Sinking Fund Method?

FAQs on Annual Sinking Fund using Sinking Fund Method

Variable Name