True or false. 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.
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True. A sinking fund is a fund formed by periodically setting aside money to repay a debt or replace a wasting asset (gradually over time).
The amount of money at the nth period equals the amount at the (n- 1) period plus the interest earned on that plus the periodic payment. Similar to the value of an ordinary annuity.
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