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Problem 5-22 (Solving for r with annuities) Nicki Johnson, a sophomore mechanical engineering student, receives a call from an insurance agent, who believes that Nicki is an older woman ready to retire from teaching. He talks to her about several annuities that she could buy that would guarantee her an annual fixed income. The annuities are as follows:AnnuityInitial Payment Into Annuity (At t= 0)Amount of Money Received Per YearDuration Of Annuity (Years)A$50,000$8,50012B$60,000$7,00025C$70,000$8,00020If Nicki could earn 11 percent on her money by placing it in a savings account, should she place it instead in any of the annuities? Which ones, if any? Why?
