Problem Solving and Modelling Assessment

Context

Your house is starting to look a little tired, and it is time for some renovation. According to experts, renovating kitchens and bathrooms get the best return on investment, so you decide to renovate one of these rooms. You currently have no money in the bank, so a period of saving is required to fund the renovation or a bank loan. To analyse the feasibility of this project, you will need to prepare a budget taking into account:

• the various material costs,
• demolition,
• whether you provide all, some or none of the labour,
• fixed expenses, discretionary spending and savings,
• contingencies (waste, unexpected repairs ),
• complete repayment of a loan (unless you opt to save the full amount).

Task

You are to undertake a feasibility study by producing a personal budget based on the results of your mathematical research, then refine the model to ensure you can afford the renovation within a reasonable timeframe. Investigate the costs of various materials and quality levels. At a minimum, you should look at flooring, tiling and paint. Your current financial situation is:

• you are a retail employee working full-time Monday to Friday, making $28/hr (you aren’t sure if this figure is before or after-tax)
• you don’t currently have a specific budget, but you have heard that a good plan is to budget for fixed expenses (e.g. rent, food) as being 60% of your wage, allowing the other 40% to be split among discretionary spending (e.g. entertainment) and savings
• your current bank balance is $0

Your budget should be informed by a range of observations you have made about the situation and relevant assumptions that you have made where specific information is not available. You may like to consider the following, among other factors:

• The amount of money available for renovation based on the information given
• The quality level of desired renovations
• Accounting for wastage and contingencies just in case an issue arises
• Amount to be budgeted for the work of tradesmen (e.g. double the cost of materials)
• Inflation of prices during the savings period, or interest accrued by a loan

To complete this task, you must:

• Use your knowledge of consumer arithmetic to investigate the problem and create a budget spreadsheet based on your observations and chosen You will also include your used Excel/Google Sheet formulas in your report body SOLVE
• Detail all calculations needed to calculate the budget (e.g. area of tiling required)
• You must use technology to develop your response (e.g. spreadsheeting, diagram generation, check calculations with online calculators)
• Write a report in the Problem Solving and Modelling Task format as detailed by the QCAA: Formulate, Solve, Evaluate, while considering your Communication throughout