Definition of "Sinking fund"

Marissa Hidalgo real estate agent
Marissa Hidalgo, Real Estate Agent Real Estate Masters RGV, LLC

Fund set aside for periodic payments, aimed at reducing a financial obligation taken out to buy real estate, or to accumulate enough funds to buy property or plant expansion. The principal deposited into the sinking fund earns interest. The total amount accumulated is then used for the desired purpose.

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