Answer:
$21,420
Explanation:
The total expense in year 1 was $21000
the inflation rate is 2 percent. it means prices will increase by 2 percent.
The amount to be spent in year 2 will be more by 2% than year 1
If year expenses are 100%, year 2 expenses will be 102%
Actual year 2 expense will be 102% of $21,000
=102/100 x $21,000
=1.02 x $21,000
=$21,420
