Answer:
$48
Explanation:
Data provided in the question:
Life annuity = $3,200
Monthly payments = $80
George's Life expectancy = 100 months
Now,
The annuity exclusion ratio = [tex]\frac{\textup{Life annuity }}{\textup{Life expectancy}}[/tex]
or
The annuity exclusion ratio = [tex]\frac{\textup{3,200}}{\textup{100}}[/tex]
or
The annuity exclusion ratio = $32
Therefore,
Return on capital per payment = $32
Hence,
The amount of the first $80 payment will George include in his gross income = $80 - $32
= $48
