Rate of Sinking Fund given YP Calculator

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✖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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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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NSS College of Engineering (NSSCE), Palakkad

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< Valuation Engineering Calculators

Coefficient of Annual Sinking Fund

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

Coefficient of Annual Sinking Fund given Sinking Fund

LaTeX Go Coefficient of Sinking Fund = Annual Installment/Sinking Fund

Annual Installment given Sinking Fund

LaTeX Go Annual Installment = Coefficient of Sinking Fund*Sinking Fund

Sinking Fund for Buildings

LaTeX Go Sinking Fund = Annual Installment/Coefficient of Sinking Fund

Rate of Sinking Fund given YP Formula

LaTeX Go

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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