George purchased a life annuity for $5,000 that will provide him $125 monthly payments for as long as he lives. Based on IRS tables, George's life expectancy is 100 months. How much of the first $125 payment will George include in his gross income?

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A: The concept used in the question is know as the time value of money. In the question, it is given…

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A: The question gives the following information:

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A: Answer and calculations are given below

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A: Using Future value function in excel

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