Target Exam

CUET

Subject

-- Applied Mathematics - Section B2

Chapter

Financial Mathematics

Question:

The fund created to accumulate money over the years to discharge a future obligation is known as:

Options:

Emergency Fund

Perpetuity

Sinking Fund

Equity

Correct Answer:

Sinking Fund

Explanation:

The correct answer is Option (3) → Sinking Fund

A sinking fund is created to accumulate money over the years for discharging a future obligation such as repayment of debt or replacement of an asset.