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QUESTION 3 Anne purchased an annuity from an insurance company that promised to pay her $20,000 per year for the next ten years. Anne

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QUESTION 3 Anne purchased an annuity from an insurance company that promised to pay her $20,000 per year for the next ten years. Anne paid $155,000 for the annuity, and in exchange she will receive $200,000 over the term of the annuity. How much of the first $20,000 payment should Anne include in gross income? QUESTION 4 Larry purchased an annuity from an insurance company that promises to pay him $1,500 per month for the rest of his life. Larry paid $168, 192 for the annuity. Larry is in good health, and he is 72 years old. Larry received the first annuity payment of $1,500 this month. Use the expected number of payments in Exhibit 5-1 for this problem. How much of the first payment should Larry include in gross income?

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