Computing future living expenses. a family spends $48,000 a year for living expenses. if prices increase by 2 percent a year for the next three years, what amount will the family need for their living expenses after three years?

Question

Matias Valencia

Business

3 January, 23:11

Computing future living expenses. a family spends $48,000 a year for living expenses. if prices increase by 2 percent a year for the next three years, what amount will the family need for their living expenses after three years?

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Trace Coleman · Answer 1

The answer is "$50,928".

family spends yearly for living expenses = $48,000

prices increase by 2 percent a year for the next three years

So, future value = (1+0.02) ³

=1.061

amount family need for their living expenses after three years = $48,000 x 1.061 = $50,928