1. Anne purchased an annuity from an insurance company that promised to pay her $23,000 per year for the next ten years. Anne paid $170,200 for the annuity, and in exchange she will receive $230,000 over the term of the annuity.

a. How much of the first $23,000 payment should Anne include in gross income? (Do not round intermediate calculations.)

Amount to be included: ____?___

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

Income recognized: ____?___