Problem: Mary buys an annuity from a life insurance company. She is 45 years old. She pays 75000 for the annuity. The annuity will begin to pay her 8000 annually beginning in 5 years for the rest of her life. Under a table published by the IRS Mary life expectancy is 35 years (80 years old). Because Mary is a habitual smoker her doctor has told he that her life expectancy is closer to 15 years (60 years old). In the first year that Mary receives a payment of 8000 under the annuity plan. How much will she have to include in income? When Mary is 83 years old, she receives 8000. How much is included in her income?