Determining annuity payments

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Reference no: EM13130988

On January 1, 2010, Andrea purchased a 20-year annuity for $160,000 from LUKE LIBERTY (an established insurance company). Under the annuity, Andrea will receive payments of $1,480 for each month of annuity's life. How much of the annuity payments may be excluded from Andrea's Gross Income for 2010 (assume all 12 monthly payments were made in 2010)?

a. $0

b. $8,000

c. $9,760

d. $17,760

Reference no: EM13130988

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