Using an Inheritance He Recently Received, Sam Wants to Purchase

Short Answer

Using an inheritance he recently received, Sam wants to purchase a deferred annuity that will pay $5,000 every three months between age 60 (when he plans to retire) and age 65 (when his permanent pension will begin). The first payment will be received three months after he reaches 60, and the last payment will be received on his 65^th birthday. If Sam's current age is 50 years and 6 months and the invested funds will earn 4.4% compounded quarterly, what amount must he invest in the deferred annuity?