Question

A family spends $30,000 a year for living expenses. If prices increase by 5 percent a year for the next three years, what amount will the family need for their living expenses after three years?

Answer 1

The family will need $34500.

Explanation:

1. 5% of 30000 is 1500.

2. 3 times 1500 is 4500.

3. Add 4500 and the starting amount.