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Fran purchased an annuity that provides $5,000 quarterly payments for the next 10 years. The annuity was purchased at a cost of $75,000. How much

Fran purchased an annuity that provides $5,000 quarterly payments for the next 10 years. The annuity was purchased at a cost of $75,000. How much of the first quarterly payment will Fran include in her gross income?

Multiple Choice

$1,875.
None of the choices are correct.
$3,125.
$5,000.
$9,900.

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