What is amortization? What is sinking fund? If you took a loan of $100,000. You want to pay it back in 5 years. Suppose the interest rate is 6% compounded monthly. To find the monthly payment, should you use amortization or sinking fund approach? What is the monthly payment? If you want to have $100,000 in your saving account at the end of 10 years from now on, interest rate is 6% compounded monthly, to find the monthly contribution, should you use amortization or sinking fund approach? Find the monthly contribution to your saving account.