Carla would like to have 230,000 saved in 8 years (at the end of year 8) to pay for a trip around the world. She plans to start saving in equal annual installment in two years from today and can earn 6.2% on her savings. How much must she invest each year to reach her goal.

A= $32,807.72

Explanation:

Giving the following information:

Future value= $230,000

Number of periods= 6 years

Interest rate= 6.2%

To calculate the annual deposits, we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

Isolating A:

A= (FV*i)/{[(1+i)^n]-1}

A= (230,000*0.062) / [(1.062^6) - 1]

A= $32,807.72

d, conspicuous consumption is when you try to increase your wealth or social status (and in the case he's trying to create the perception of wealth considering he can't really afford it)