Steven purchased an annuity for $100,000 that will pay him $1,000 per month for twenty years....
Steven purchased an annuity for $100,000 that will pay him $1,000 per month for twenty years. What amount should Steven include in his income each year (rounded)?
A) $0
B) $4,675
C) $7,000
D) $12,000
Homework Answers
| Total amount received | 240000 | =1000*12*20 |
| Less: Purchase amount | 100000 | |
| Total taxable amount | 140000 | |
| Divide by Years | 20 | |
| Amount to include in income each year | 7000 | |
| Option C $7,000 is correct |
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