Worked examples / Putting it off

Wait to replace something that still works

A $1,200 appliance that still works, kept another year, with a 1 in 20 chance of a rushed $1,300 replacement.

Waiting pays

Putting it off for 12 months leaves you $43 ahead.

Deal with it now$1,200for certain

Put it off$1,157on average

Waiting only pays if the chance of it getting worse is under 48%. You put 5%.
For every $1 you put off, you pay $0.96.
Keeping the money earns you $48 meanwhile, which is already counted.

Put in your own numbers

This is a worked example with illustrative figures, not data about any real person or company. Change any of them in the calculator and the answer changes with them.

How this answer was worked out

Cost later	$1,200
Expected later	95% x $1,200 + 5% x $1,300 = $1,205
Carrying cost	$0 x 12 = $0
Earned by waiting	$1,200 x 4% x 12 / 12 = $48
Putting it off costs	$1,205 + $0 - $48 = $1,157
Waiting costs you	$1,157 - $1,200 = -$43
Per $1 put off	$0.96
Break-even chance	48%

Every formula is written out on the formulas page.

What the calculator asks you

What replacing it costs now
Months you would put it off
Chance it fails and you must replace it in a hurry
What a rushed replacement would cost
How much it grows each month if left
Extra it costs to run each month meanwhile
Yearly rate the money earns you while you keep it

Open the calculator

How this answer was worked out

What the calculator asks you

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