How much income will anne recognize over the term of annuity

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Reference no: EM13905833

Anne purchased an annuity from an insurance company that promised to pay her $20,000 per year for the next ten years. Anne paid $145,000 for the annuity, and in exchange she will receive $200,000 over the term of the annuity.

a) How much of the first $20,000 payment should Anne include in gross income?

b) How much income will Anne recognize over the term of the annuity?

Reference no: EM13905833

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