Understanding a Sinking Fund
A sinking fund is a method used by companies to set aside money over time to repay debt or replace assets. In this case, the company aims to accumulate a total of 200,000 through yearly payments, with an interest rate of 6% per annum.

Formula for Yearly Payment
The formula to calculate the yearly payment (A) for a sinking fund is derived from the future value of an annuity formula:
\[
A = \frac{P \times r}{(1 + r)^n - 1}
\]
Where:
- **P** = Future value of the fund (200,000)
- **r** = Interest rate (0.06)
- **n** = Number of years
Assuming the company plans to accumulate this amount in 10 years:

Calculating the Yearly Payment
1. **Future Value (P)**: 200,000
2. **Interest Rate (r)**: 0.06
3. **Number of Years (n)**: 10
Now, substituting these values into the formula:
\[
A = \frac{200000 \times 0.06}{(1 + 0.06)^{10} - 1}
\]
Calculating the denominator:
\[
(1.06)^{10} \approx 1.79085
\]
Thus:
\[
A = \frac{200000 \times 0.06}{1.79085 - 1} \approx \frac{12000}{0.79085} \approx 15,189.42
\]

Conclusion
The yearly payment required by the company to achieve a sinking fund of 200,000 at an interest rate of 6% per annum over 10 years is approximately **15,189.42**. This systematic approach ensures that the company can meet its financial obligations effectively.