Date: Oct 12, 2026

Sinking Fund Example Given Interest Rate

When an interest rate is given, a sinking fund example usually uses the future-value-of-an-annuity formula. The rate and deposit period must match, and timing matters.

A Simple Interest Example

Suppose an account pays a hypothetical 1% per deposit period and you deposit $100 at the end of each of two periods.

The first deposit earns $1 during the second period. The second earns no interest before the measurement date. The total is $201.

This follows the ordinary-annuity approach, with end-of-period deposits. [web:145]