Answer

Year
Anuual
Living Expnses

1
44440

2
44880

3
45320

Working notes for the above answer is as under

we have been provided with the information that,

A family spends $44000 a year for living expenses So current living expanses is $ 44,000

and it was given that, prices increase 1% for a year

and for the next three years the amount needed for living expanses are as follow

If we see in the chart the price increase @1 % for 3 years are as follow

year 1 = 1.010

year 2 = 1.020

year 3 = 1.030

Now let us calculate the price increases

Year
Annual
Living Expanses without Increase Effect
Price
Increase@1 %
Factor
Annual
Living Expanses with Increase Effect

0
44000
1
44000

1
44000
1.01
44440

2
44000
1.02
44880

3
44000
1.03
45320