Which of the following statements are correct?

(A) A fund which is created to accumulate money over the years to discharge a future obligation is called a sinking fund.

(B) The amount or future value of perpetuity is well-defined.

(C) The sinking fund be used in any emergency.

(D) An equated monthly installment is a fixed payment made by a borrower to a lender at a specific date every month to clear off the loan.

Choose the correct answer from the options given below:

The task requires evaluating four statements about financial concepts.

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Statement (A): A fund which is created to accumulate money over the years to discharge a future obligation is called a sinking fund.

This is correct. A sinking fund is designed to accumulate money regularly so that when a future payment is due (like paying off a loan or replacing equipment), the funds are available.

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Statement (B): The amount or future value of perpetuity is well-defined.

This is incorrect. A perpetuity involves payments that continue forever (infinite time). Since there is no end point, the future value is infinite and therefore not well-defined. The present value of a perpetuity can be calculated using: PV $= \dfrac{\text{Payment}}{\text{Interest Rate}}$

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Statement (C): The sinking fund be used in any emergency.

This is incorrect. A sinking fund is created for a specific purpose and is earmarked for a particular future obligation. It cannot be used for any random emergency.

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Statement (D): An equated monthly installment is a fixed payment made by a borrower to a lender at a specific date every month to clear off the loan.

This is correct. An EMI (Equated Monthly Installment) is a fixed payment amount made on the same date each month until the loan is fully repaid.

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Statements (A) and (D) are correct.

Statements (B) and (C) are incorrect.

Therefore, the correct answer is: (A) and (D) only.