d in exchange she will receive $170,000 over 000 payment should Anne include in gross in mediate calculations.
d in exchange she will receive $170,000 over 000 payment should Anne include in gross in mediate calculations.
Chapter3: Income Sources
Section: Chapter Questions
Problem 39P
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![Anne purchased an annuity from an insurance company that promised to pay her $17,000 per year for the next 10 years. Anne paid
$130,050 for the annuity, and in exchange she will receive $170,000 over the term of the annuity.
Required:
a. How much of the first $17,000 payment should Anne include in gross income?
Note: Do not round intermediate calculations.
b. How much income will Anne recognize over the term of the annuity?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9f6e67ee-69c1-4d29-9ce7-604639235b40%2Fa1839eda-5fbc-4a14-91f8-54cd7bbad280%2Fahigvqt_processed.png&w=3840&q=75)
Transcribed Image Text:Anne purchased an annuity from an insurance company that promised to pay her $17,000 per year for the next 10 years. Anne paid
$130,050 for the annuity, and in exchange she will receive $170,000 over the term of the annuity.
Required:
a. How much of the first $17,000 payment should Anne include in gross income?
Note: Do not round intermediate calculations.
b. How much income will Anne recognize over the term of the annuity?
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