Tomorrow, on your 25th birthday, you will receive the proceeds of a trust fund that was set up by your wealthy
grandmother. She invested $10,000 at 5 percent on your 5th birthday. You plan to invest your inheritance with an insurance company at a guaranteed rate of 8 1/2 percent. When you retire at the age of 65, you will begin to draw your investment in 20 equal installments calculated to reduce your fund to $0. You will make each withdrawal at the end of the year, and that the money that remains invested will continue to earn 8 1/2 percent.
If inflation remains at a steady 6%, what will the amount of the first annuity payment be worth in today's dollars? That is: the first payment occurs at age 66. What is this payment worth in today's dollars if inflation is 6%? (round to 2 decimal places)