1. **State the problem:** We want to find the value in 2026 of a contract from 1981 worth 3000.00 dollars per year, with a 3% cost of living increase each year. 2. **Formula used:** The value grows each year by 3%, so this is a compound interest problem. The formula is: $$ V = P \times (1 + r)^n $$ where: - $V$ is the value in 2026, - $P = 3000$ is the initial amount in 1981, - $r = 0.03$ is the annual increase rate, - $n$ is the number of years from 1981 to 2026. 3. **Calculate the number of years:** $$ n = 2026 - 1981 = 45 $$ 4. **Calculate the value:** $$ V = 3000 \times (1 + 0.03)^{45} = 3000 \times 1.03^{45} $$ 5. **Evaluate $1.03^{45}$:** $$ 1.03^{45} \approx 3.8061 $$ 6. **Multiply to find final value:** $$ V = 3000 \times 3.8061 = 11418.3 $$ 7. **Answer:** The contract would be worth approximately **11418.30** dollars in 2026.