Annual sinking fund refers to the deposit reserve (equal to annuity A) that must be withdrawn in equal stages in order to pay off certain debts or accumulate certain funds (actually equal to the final value of annuity F) at the agreed future time.

Calculation formula:

Ordinary annuity final value: F=A×﹙F/A,i,n﹚.

Annual sinking fund: a = f * (a/f, I, n) = f-f/a, I, n)

Capital recovery: refers to the recovery or repayment of initial capital or debt within a certain period of time, and the equivalent amount is the annual capital recovery.

The calculation essence of annual capital recovery is: the present value of annuity is known and the amount of annuity is calculated.

A=P(A/P，I，n)=P/(P/A，I，n)