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?

Question

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

Answer 1

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.