I think the price is fair as far as the capture and developing is concerned. I have some problems with "photographing her family". Do you go there? They come to you? Your studio? Do you provide a lighting setup with multiple flashes, background etc. or do you just go to their place and take pictures?

I have no idea how much time would it take to make a good print, but I think I would raise the price on prints.

I wouldn't do this for free for a coworker. A friend is a friend, a collegue is a collegue. If the work is well received, you might receive other requests from the same client, or from other clients - other coworkers, other persons to whom you were referred by this client.

So if I were you I wouldn't do it for a price for which you wouldn't do it many times. Price in a way that it might become a future activity for you (not necessarily your main one, but a pleasant second work).

Especially don't do it for free. You'll find out that if you do it for free, you'll have difficulties even in finding them at home when you go there. And in any case "no good deed goes unpunished".

Fabrizio