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?

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