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LSDefine
Simple English definitions for legal terms
SF
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A quick definition of SF:
SF: SF stands for sinking fund, which is a special type of fund where money is regularly saved to pay off a long-term debt. It's like putting money in a piggy bank to save up for something big, like a new bike or a vacation. The money in a sinking fund grows with interest and is used to pay off the debt when it's due.
A more thorough explanation:
SF
SF stands for sinking fund, which is a sum of money set aside for a specific purpose, such as paying off a long-term debt. The money is accumulated through regular deposits with interest.
- A corporation sets up a sinking fund to pay off a bond that will mature in 10 years.
- A city establishes a sinking fund to finance the construction of a new public building.
These examples illustrate how a sinking fund is used to accumulate money over time to pay off a specific debt or finance a specific project.