Problem:
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).
Required:
Question: 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.
Note: Please describe comprehensively and provide step by step solution.