Question

I am buying a new house today and plan to make some updates and fixes to...

I am buying a new house today and plan to make some updates and fixes to the new place over the next four years.

Expenses include:

\$1,000 for an electric dog fence, installed today but payment is not due until two years from now

\$8,000 for new laminate flooring in much of the house, installed now and payment is due now

\$12,000 for a new shower and master bath - will wait four years to do this install and pay cash at that time

\$500 to add electrical outlets to the unfinished basement - will complete in two years, and pay cash at that time

\$5,000 to demo old concrete patio and replace with paver patio including built-in seating and a fire pit - will complete in four years and pay cash at that time

Create a spreadsheet to calculate the amount of money I will need to have on hand today in order to make the expected payments over the next four years. My time value of money is 5%.

i=5%

Pls find the sheet below

 Year Payment due PV Factor PV Amount Remarks 0 -8000 1 -8,000.00 For laminate flooring 1 0.952380952 0.00 2 -1500 0.907029478 -1,360.54 For electric fence & Electric Outlets 3 0.863837599 0.00 4 -17000 0.822702475 -13,985.94 For Shower & Patio -23,346.49

Total amount needed today to complete these upgrade = 23,346.49

Showing formula in excel

 Year Payment due PV Factor PV Amount Remarks 0 -8000 =1/(1+0.05)^A2 =B2*C2 For laminate flooring 1 =1/(1+0.05)^A3 =B3*C3 2 =-1000-500 =1/(1+0.05)^A4 =B4*C4 For electirc fence & Electric Outlets 3 =1/(1+0.05)^A5 =B5*C5 4 =-12000-5000 =1/(1+0.05)^A6 =B6*C6 For Shower & Patio =SUM(D2:D6)

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