S Homework Help Sav 0 Required information The following inf

S Homework Help Sav 0 Required information The following information appies to the questions displayed below. Anne purchased an annuity from an insurance company that promised to pay her $24,000 per year for the next ten years. Anne paid $176,400 for the annuity, and in exchange she will receive $240,000 over the term of the annuity. b. How much income will Anne recognize over the term of the annuity?

Solution

Answer:1(b)

Since Anne paid $176,400 for total payments of $240,000, she will recognize a total of $63,600(240,000-176,400) over the ten-year term of the lease.