Let the random variable $X$ denotes the number of the one hour period when the first break down occurs.
P(Engine works for the $3$ hours) $= P(X \geq 4)$ (No break downs in first $3$ hours)
$\qquad = 1 - P(X = 1) - P( X = 2)-P(X=3)$
Here $X$ follows geometric distribution and we get
$P= 1-p - p(1-p)-p(1-p)^2$
$\qquad = 1- 0.02 - 0.02\times 0.98 - 0.02\times 0.98^2 = 0.941192$