George purchased a life annuity for $2,000 that will provide him $50 monthly payments for as...

George purchased a life annuity for $2,000 that will provide him $50 monthly payments for as long as he lives. Based on IRS tables, George's life expectancy is 100 months. How much of the first $50 payment will George include in his gross income?

Expert Solution

Amount to be included in gross income from the first $50 payment = $50 - ($2,000 / 100)
= $50 - $20
= $30

Amount to be included in gross income from the first $50 payment = $30

jeff jeffy answered 2 years ago

3-year annuity immediate with monthly payments has an initial payment of 200. Subsequent monthly payments are...

3-year annuity immediate with monthly payments has an initial payment of 200. Subsequent monthly payments are x% more than each preceding payment. Given that the amount of the 14th payment is 481.969, determine the present value of the annuity using a 9%, compounded monthly, interest rate.

A fifteen-year annuity-immediate has monthly payments. The first payment is $300 and the monthly increase is...

A fifteen-year annuity-immediate has monthly payments. The first payment is $300 and the monthly increase is $50. Calculate the accumulated value of the annuity if the annual effective interest rate is 4%. pls show work and formula, thanks!

Monthly payments of ?$75 are paid into an annuity beginning on January? 31, with a yearly...

Monthly payments of ?$75 are paid into an annuity beginning on January? 31, with a yearly interest rate of 12?%, compounded monthly. Add the future values of each payment to calculate the total value of the annuity on September 1. On September? 1, the value of the annuity will be: ?(Round to the nearest? cent.)

Shelly Sanders gets a loan for $2,000 and repays the loan in 12 monthly payments of...

Shelly Sanders gets a loan for $2,000 and repays the loan in 12 monthly payments of $172.50 per month. Under the APR formula, what is the amount of interest included in her first payment? A) $9.61 B)$ 8.17 C)$ 10.77 D) $ 5.83 E) $ 9.33

Mustafa's portfolio consists of an annuity with monthly payments of $1,000 each month for five years...

Mustafa's portfolio consists of an annuity with monthly payments of $1,000 each month for five years and a $20,000 8% eight-year par-value bond bearing semiannual coupons. Calculate the Macaulay duration of the portfolio at 9%. Show ALL the work with formulas and explanations, should NOT use Microsoft Excel Sheet. Thank you.

A 12-year annuity of $225 monthly payments begins in 7 years (the first payment is at...

A 12-year annuity of $225 monthly payments begins in 7 years (the first payment is at the end of the first month of year 7, so it's an ordinary annuity). The appropriate discount rate is 8%, compounded monthly. What is the value of the annuity 5 years from today? $20,786.13 $15,109.87 $17,722.18 $16,363.98

2. A 5-year annuity of $350 monthly payments begins in 10 years (the first payment is...

2. A 5-year annuity of $350 monthly payments begins in 10 years (the first payment is at the end of the first month of year 10, so it's an ordinary annuity). The appropriate discount rate is 12%, compounded monthly. What is the value of the annuity today?

Required Annuity Payments. Your father is 50 years old and will retire in 10 years. He...

Required Annuity Payments. Your father is 50 years old and will retire in 10 years. He expects to live for 25 years after he retires, until he is 85. He wants a fixed retirement income that has the same purchasing power at the time he retires as $35,000 has today. (The real value of his retirement income will deline annually after he retires). His retirement income will begin the day he retires, 10 years from today, at which time he...

18. You are comparing two investments, both of which provide annuity payments in exchange for a...

18. You are comparing two investments, both of which provide annuity payments in exchange for a lump sum investment today. Each annuity is for a period of 25 years and each pays $500 a month. You require a 7 percent return on these investments. Annuity A pays at the beginning of each month and annuity B pays at the end of each month. Given this information, which one of the following statements is correct? a. Both annuities are equally valuable...

An 8-year annuity gives monthly payments. The first payment is $3.50 one month from now, and...

An 8-year annuity gives monthly payments. The first payment is $3.50 one month from now, and each subsequent payment is $1.00 higher than the previous payment. At a nominal rate of interest 10.00% convertible monthly, what is the price of this annuity?

Question