Hi Dave,

You can calculate the contribution by calculating the FV of each of the sinking fund payments at the end of year 4, and then subtracting that from $250,000.

FV = PV*(1+r)^t, where r is interest rate, and t is the number of years between contribution and valuation.

The table below shows the future value of each of the sinking fund payments. As you can see, after earning 20% interest per year on each of the payments, the company is left with a $10,000 shortfall at the end of year 4.