Average health premiums have been increasing at a rate of 5% per year. If an average family's premiums are $11,430 this year, what will they be in 2 years?
If necessary, round your answer to the nearest cent.
To find the average family's premiums in 2 years, we need to apply a 5% increase for each year.
First, we need to calculate the increase for the first year:
Premium increase = $11,430 * 5% = $571.50
So, the average family's premiums for the first year will be:
Premiums for the first year = $11,430 + $571.50 = $12,001.50
Now we can calculate the increase for the second year:
Premium increase = $12,001.50 * 5% = $600.08
Therefore, the average family's premiums in 2 years will be:
Premiums in 2 years = $12,001.50 + $600.08 = $12,601.58
Rounding to the nearest cent, the average family's premiums in 2 years will be $12,601.58.