Tim retired during the current year at age 59. He purchased an annuity from American National Life Company for $90,000. The annuity pays Tim $1,125 per month for life. (Click the icon to view the Expected Return Multiple table) Requirements a. Compute Tim's annual exclusion. b. How much income will Tim report each year after reaching age 84? Requirement a. Compute Tim's annual exclusion. Begin by computing the exclusion ratio. (Enter the answer as a decimal rounded to four decimal places, .XXXX.) Exclusion ratio
Tim retired during the current year at age 59. He purchased an annuity from American National Life Company for $90,000. The annuity pays Tim $1,125 per month for life. (Click the icon to view the Expected Return Multiple table) Requirements a. Compute Tim's annual exclusion. b. How much income will Tim report each year after reaching age 84? Requirement a. Compute Tim's annual exclusion. Begin by computing the exclusion ratio. (Enter the answer as a decimal rounded to four decimal places, .XXXX.) Exclusion ratio
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Reference
Ordinary Life Annuities (One Life) Expected Return Multiple
Multiple
Age
Age
76.6
42
79
75.6
43
80
74.7
44
81
73.7
82
72.7
83
71.7
84
70.7
85
69.7
86
68.8
87
67.8
88
66.8
89
65.8
90
64.8
91
63.9
92
62.9
93
Age
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
45
46
47
48
49
50
51
52
53
54
55
56
Multiple
40.6
39.6
38.7
37.7
36.8
35.9
34.9
34.0
33.1
32.2
31.3
30.4
29.5
28.6
27.7
Multiple
10.0
9.5
8.9
8.4
7.9
7.4
6.9
6.5
6.1
5.7
5.3
5.0
4.7
4.4
4.1
Transcribed Image Text:Tim retired during the current year at age 59. He purchased an annuity from American National Life Company for $90,000. The annuity pays Tim $1,125 per month for life.
(Click the icon to view the Expected Return Multiple table)
Requirements
a. Compute Tim's annual exclusion.
b. How much income will Tim report each year after reaching age 84?
Requirement a. Compute Tim's annual exclusion.
Begin by computing the exclusion ratio. (Enter the answer as a decimal rounded to four decimal places, .XXXX.)
Exclusion ratio
=
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