Thomas Purchased an Annuity for $20,000 That Will Pay Him

question 16

Multiple Choice

Thomas purchased an annuity for $20,000 that will pay him $500 per month for ten years.What amount should Thomas include in his income each year?

• A)$0
• B)$2,000
• C)$4,000
• D)$6,000

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Definitions:

Classified by Purpose

A method of grouping or categorizing items according to their intended use or role within a system or process.

Profit

The financial gain achieved when the revenues generated from business activities exceed the expenses, costs, and taxes needed to sustain those activities.

Not-for-Profit

An organization that operates for purposes other than making a profit, often focusing on social, educational, or charitable activities.

Corporate Form

A legal structure for a business recognized as a separate legal entity from its owners, offering limited liability and other advantages.