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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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