J. Johnson receives a defined retirement benefit, which commences in 15 years. At that time, Johnson is to receive monthly cash payments of $3,000 for 10 years with the first payment scheduled for the end of the initial month of benefit. Assume an interest rate of 6%.
Required
What is the value of the deferred annuity as of today? Assume annual compounding during the deferral period.
for formulas and calculations, refer to the image below -
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