Answer:
The present value of delayed annuity is $11366
Explanation:
The annuity is delayed annuity and the present value will be calculated in two step.
Step 1 Find the normal annuity starting from year 4 (Assume that the first payment is starting from year zero)
Now
Present Value at year 4 = Cash flow * Annuity factor
And annuity factor for first eight years assuming that the first cash flow is arising in the year 4, is 4.968
This implies that:
Present value at the start of the year 4 = $3600 * 4.968 = $17885
Step 2 Discount this present value at year 4 to back year zero
Present value at year zero = Present Value at year 4 * (1+r)^4
Present value at year zero = $17885 * 0.636 = $11366