How much should they set aside monthly to afford the remodel

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Tim and Denise just bought a very old house. They love the charm of it but know it will need a major remodel within the next 10 years. The plan is for the remodel to take 2 years with $10,000 being spent on electrical upgrades during year one and $10,000 being spent on plumbing upgrades during year 2. They believe they can invest at 7%, but the cost of the construction is increasing at 3% per year. Both compounding annually. An inheritance from Denise’s uncle let them set aside $2,000 towards this project already. Will they be able to afford the project in 10 years? If not, how much should they set aside monthly to afford the remodel in 10 years?

Reference no: EM13894433

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