Personal Finance 1st Edition by Jack R. Kapoor

Exercise 19

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?

Step 1 of 2

Compute the future living expenses:

The amount spent by family for living expenses for a year is $48,000.

If the price increase by 2% a year for the next three years, then the amount required for the family would be calculated using the below formula.