Finite Math
posted by Greg on .
A sinking fund is the accumulated amount to be realized at some future date (the end of the term) when a fixed number of periodic payments are paid into an account earning interest at the rate of i per period.

The amount at period n is the amount at period n1 plus interest earned on that plus the periodic payment.
x[n] = x[n1](1 + I) + P
x[n] = x[n2](1+I)^2 +((1+I)^2 1)P/I
x[n] = x[n3](1+I)^3 +((1+I)^3 1)P/I
...and so on...
x[n] = x[0](1+I)^n + ((1+I)^n 1)P/I