EXHIBIT $5-1$

Larry purchased an annuity from an insurance company that promises to pay him $$3,500$ per month for the rest of his life. Larry paid $$429,240$ for the annuity. Larry is in good health and is $72$ years old. Larry received the first annuity payment of $$3,500$ this month. Use the expected number of payments in Exhibit $5-1$ for this problem.

Problem $5-52$ Part a $($Algo$)$

a$.$ How much of the first payment should Larry include in gross income? Table for Expected Return Multiple for Ordinary Single$-$Life Annuity