Question

a typical family of four spends $897.20/ month for food.t If inflation occurs at the rate of 3%/y year over the next 4 years, how much should the typical familly of four expect to spend for food 4 years from now? (Round your answer to the nearest cent.) per month

Answer 1

To calculate the future monthly food cost with inflation, multiply the current cost by (1 + inflation rate) raised to the number of years. For a 3% inflation over 4 years on a $897.20 expense, the future cost is approximately $1009.27.

Step-by-step explanation:

The question is asking us to calculate the expected monthly food expense for a typical family of four if there is a 3% rate of inflation per year over the next 4 years. The formula for calculating the future cost after accounting for inflation is the current cost multiplied by (1 + the rate of inflation) raised to the number of years.

Let's use this formula step by step:

1. Current monthly food cost: $897.20.
2. Annual inflation rate: 3% or 0.03.
3. Number of years: 4.
4. Future cost calculation: $897.20 * (1 + 0.03)^4 = $897.20 * 1.1255 = $1009.27 (rounded to the nearest cent).

Therefore, the expected monthly food cost for a family of four, 4 years from now, would be approximately $1009.27.