Compute taxable amount for herberts annuity payments

Reference no: EM1329826

Herbert purchased a 10 year annuity for $96,000 late in 2008. The annuity will pay him $4,000 per month for ten years starting on Sept 1, 2008. How much of the $16,000 received this year will be taxable?

A. 12,800
B. 16,000
C. 0
D. 3,200

Reference no: EM1329826

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