John wants to make a deposit on January 1, 2016, to be able to withdraw $1,200 at the beginning...

John wants an annuity with cash flows of $1,200 starting from January 1, 2020, for four years.

John should deposit the amount equal to the present value of the annuity in the account earning a 6% interest rate.

Computation of present value of annuity on January 1, 2020

To arrive at the present value on January 1, 2016, we will further discount for 4 years.

{eq}\text{Amount to be deposited} = \dfrac{\$4,407.62}{1.06^4} {/eq}

{eq}\text{Amount to be deposited} = \$3,491.25 {/eq}