Sinking fund:

 The fund which is gradually accumulated by way of periodic on annual deposit for the replacement of the building or structure at the end of its useful life, is termed as sinking fund.

             The object of creating sinking fund is to accumulate sufficient money to meet the cost of construction or replacement of the building or structure after its utility period.

Sinking fund, I= S_i /(1+i)ⁿ-1

where,

S = total amount of sinking fund

n = number of years required to accumulate sinking fund.

i = rate of interest in decimal

I = annual instalment required.

Hence, the correct option is (A).