Kenny lives in Greenpoint, where the cost of living increases by 8% every year. If Kenny spends $50,700 this year, how much can he expect to spend 11 years from now to maintain the same standard of living?

If necessary, round your answer to the nearest cent.
$

1 answer

106,726.63

To calculate the cost of living 11 years from now, we can use the formula for compound interest:

FV = PV * (1 + r)^n

Where:
FV = Future Value of the cost of living after 11 years
PV = Present Value of the cost of living this year ($50,700)
r = Annual increase in cost of living (8% or 0.08)
n = Number of years (11)

Plugging in the values:

FV = $50,700 * (1 + 0.08)^11
FV = $50,700 * (1.08)^11
FV = $50,700 * 2.488256286
FV = $126,026.63

So, Kenny can expect to spend $126,026.63 11 years from now to maintain the same standard of living.