Rate of Sinking Fund given YP Calculator

✖Years Purchase in perpetuity is defined as the capital sum required to be invested in order to receive a net annual income of rs/- 1 at a certain rate of interest.ⓘ Years Purchase [Y]			+10% -10%
✖Rate of Interest on Capital is the product of amount of capital, interest per annum and the years or period of interest.ⓘ Rate of Interest on Capital [I_p]			+10% -10%

✖Rate of Sinking Fund is the fund that is created and set up purposely for repaying debt.ⓘ Rate of Sinking Fund given YP [I_s]

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Formula

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Rate of Sinking Fund given YP

Formula

`"I"_{"s"} = (1/"Y")-"I"_{"p"}`

Example

`"0.010909"=(1/"11")-"0.08"`

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Rate of Sinking Fund given YP Solution

STEP 0: Pre-Calculation Summary

Formula Used

Rate of Sinking Fund = (1/Years Purchase)-Rate of Interest on Capital
I_s = (1/Y)-I_p
This formula uses 3 Variables

Variables Used

Rate of Sinking Fund - Rate of Sinking Fund is the fund that is created and set up purposely for repaying debt.
Years Purchase - Years Purchase in perpetuity is defined as the capital sum required to be invested in order to receive a net annual income of rs/- 1 at a certain rate of interest.
Rate of Interest on Capital - Rate of Interest on Capital is the product of amount of capital, interest per annum and the years or period of interest.

STEP 1: Convert Input(s) to Base Unit

Years Purchase: 11 --> No Conversion Required
Rate of Interest on Capital: 0.08 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

I_s = (1/Y)-I_p --> (1/11)-0.08

Evaluating ... ...

I_s = 0.0109090909090909

STEP 3: Convert Result to Output's Unit

0.0109090909090909 --> No Conversion Required

FINAL ANSWER

0.0109090909090909 ≈ 0.010909 <-- Rate of Sinking Fund

(Calculation completed in 00.004 seconds)

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Created by Chandana P Dev

NSS College of Engineering (NSSCE), Palakkad

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Coorg Institute of Technology (CIT), Coorg

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< 17 Valuation Engineering Calculators

Annual Installment for Sinking Fund

Go Annual Installment = Sinking Fund*Rate of Interest/((1+Rate of Interest)^Number of Years Money is Invested-1)

Coefficient of Annual Sinking Fund

Go Coefficient of Sinking Fund = Rate of Interest/((1+Rate of Interest)^Number of Years Money is Invested-1)

Annual Sinking Fund using Sinking Fund Method

Go Annual Sinking Fund = Rate of Interest/((1+Rate of Interest)^Life of Asset in Years-1)

Percentage Rate of Annual Depreciation

Go Percentage Rate of Annual Depreciation = 1-(Scrap Value/Original Cost)

Years Purchase when Sinking Fund is Recovered

Go Years Purchase = 1/(Rate of Interest on Capital+Rate of Sinking Fund)

Rate of Sinking Fund given YP

Go Rate of Sinking Fund = (1/Years Purchase)-Rate of Interest on Capital

Coefficient of Annual Sinking Fund given Sinking Fund

Go Coefficient of Sinking Fund = Annual Installment/Sinking Fund

Annual Installment given Sinking Fund

Go Annual Installment = Coefficient of Sinking Fund*Sinking Fund

Sinking Fund for Buildings

Go Sinking Fund = Annual Installment/Coefficient of Sinking Fund

Capitalized Value using Profit Based Valuation

Go Capitalized Value = Net Rental Income*Years Purchase

Capitalized Value

Go Capitalized Value = Net Rental Income*Years Purchase

Gross Rent given Net Rent in Rental Method

Go Gross Rent = Net Rental Income+Outgoings of Repairs

Net Rent using Rental Method of Valuation

Go Net Rental Income = Gross Rent-Outgoings of Repairs

Outgoings using Rental Method

Go Outgoings of Repairs = Gross Rent-Net Rental Income

Net Income using Profit Based Valuation

Go Net Income = Gross Income-Outgoings of Repairs

Rate of Interest given Years Purchase

Go Rate of Interest = 100/Years Purchase

Years Purchase

Go Years Purchase = 100/Rate of Interest

Rate of Sinking Fund given YP Formula

Rate of Sinking Fund = (1/Years Purchase)-Rate of Interest on Capital
I_s = (1/Y)-I_p

What are the advantages of sinking funds?

1. Brings in investors: Investors are very well aware that companies or organizations with a large amount of debt are potentially risky. However, once they know that there is an established sinking fund, they will see a certain level of protection for them so that in the case of a default or bankruptcy, they will still be able to get their investment back.

2. The possibility of lower interest rates: A company with poor credit ratings will find it difficult to attract investors unless they offer higher interest rates. A sinking fund offers alternative protection for investors so that companies can offer lower interest rates.

3. Stable finances: A company’s economic situation is not always definite, and certain financial issues can shake its stable ground. However, with a sinking fund, the ability of a company to repay its debts and buy back bonds will not be compromised.

How to Calculate Rate of Sinking Fund given YP?

Rate of Sinking Fund given YP calculator uses Rate of Sinking Fund = (1/Years Purchase)-Rate of Interest on Capital to calculate the Rate of Sinking Fund, The Rate of Sinking Fund given YP formula is defined as the rate of interest on capital and years purchased. Rate of Sinking Fund is denoted by I_s symbol.

How to calculate Rate of Sinking Fund given YP using this online calculator? To use this online calculator for Rate of Sinking Fund given YP, enter Years Purchase (Y) & Rate of Interest on Capital (I_p) and hit the calculate button. Here is how the Rate of Sinking Fund given YP calculation can be explained with given input values -> 0.010909 = (1/11)-0.08.

FAQ

What is Rate of Sinking Fund given YP?

The Rate of Sinking Fund given YP formula is defined as the rate of interest on capital and years purchased and is represented as I_s = (1/Y)-I_p or Rate of Sinking Fund = (1/Years Purchase)-Rate of Interest on Capital. Years Purchase in perpetuity is defined as the capital sum required to be invested in order to receive a net annual income of rs/- 1 at a certain rate of interest & Rate of Interest on Capital is the product of amount of capital, interest per annum and the years or period of interest.

How to calculate Rate of Sinking Fund given YP?

The Rate of Sinking Fund given YP formula is defined as the rate of interest on capital and years purchased is calculated using Rate of Sinking Fund = (1/Years Purchase)-Rate of Interest on Capital. To calculate Rate of Sinking Fund given YP, you need Years Purchase (Y) & Rate of Interest on Capital (I_p). With our tool, you need to enter the respective value for Years Purchase & Rate of Interest on Capital and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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