Question

Bill and sally kaplan have an annual spending plan that amounts to $104,000. if inflation is 4 percent a year for the next three years, what amount will the kaplans need for their living expenses three years from now?

Answer 1

to get their need for living expenses per year just multiply each year with 1.04

first year: $104,000
second year: $10400(1.04) = $108160
third year: $108160(1.04) = $112486
fourth year: $112486(1.04) = $116987