Sinking Fund Calculator

Interest compounds on your current balance and on every contribution you make between now and the deadline, so a higher rate does part of the work of reaching your target for you. The calculator solves for the exact monthly payment that, combined with that compounding, lands on your target amount — so raising the APY (holding the target, timeline, and current savings fixed) always reduces the monthly amount you need to contribute yourself.

With no interest, the formula simplifies to plain division: it takes the remaining shortfall (Target Amount minus Currently Saved) and divides it evenly across the months remaining, since there's no compounding to help close the gap. This is the same answer you'd get from a basic "how much do I need to save each month" calculation without any bank involved.

Spreading the same shortfall across more months means each individual payment can be smaller, and — if your Savings APY is above 0% — those extra months also give your balance more time to compound before the deadline, which does part of the work for you. Both effects push the required monthly contribution down as the timeline lengthens, holding the target and current savings fixed.

Not quite — it reduces it by more than a dollar-for-dollar amount whenever your Savings APY is above 0%, because the money you've already saved also earns interest between now and the deadline, on top of directly shrinking the shortfall. At 0% APY, though, an extra dollar already saved reduces the shortfall by exactly one dollar, which is then split evenly across the remaining months.