Fran Purchased an Annuity That Provides $10,200 Quarterly Payments for the Next

question 23

Multiple Choice

Fran purchased an annuity that provides $10,200 quarterly payments for the next 10 years. The annuity was purchased at a cost of $306,000. How much of the first quarterly payment will Fran include in her gross income?

• A)$7,650
• B)$2,550
• C)$10,200
• D)$33,000
• E)None of the choices are correct

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Definitions:

Voluntarily Entered

A decision or action taken freely and without coercion by an individual or entity.

Per Se

A Latin term often used in law to indicate something that is intrinsically or inherently the case, without needing further proof or qualification.

Foreseeable Misuse

A legal concept referring to the predictable and incorrect use of a product that manufacturers should anticipate and guard against.

Obvious Risks

Hazards or dangers that are clear and apparent, which a reasonable person would recognize.