Penny, Age 45, Purchased an Annuity Contract That Cost $45,000

question 103

Multiple Choice

Penny, age 45, purchased an annuity contract that cost $45,000. The contract will pay Penny $600 per month for 10 years after she reaches age 62. During the current year, Penny turns 62 and receives 4 payments under the contract. Penny's taxable income from the annuity payments is:

• A)$900
• B)$1,500
• C)$1,708
• D)$2,250
• E)$2,400

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