A deferred annuity will pay you $500 at the end of each year for 10 ye

A deferred annuity will pay you $500 at the end of each year for 10 years, however the first
payment will not be made until three years from today (payments will be made at the end of years
3 through 12).

What amount will you have to deposit today to fund this deferred annuity? Use an
8% discount rate and round your answer to the nearest $100.
A) $2,200 B) $3,400 C) $2,400 D) $2,900

ANSWER

D