5-10B. (Solving for i in annuities) Ellen Denis, a sophomore mechanical engineering student, receives a call from an insurance agent, who believes that Ellen 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:

If Ellen could earn 12 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?

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INITIAL PAYMENT INTO ANNUITY ANNUITY A (AT f = 0) $50,000 AMOUNT OF MONEY RECEIVED PER YEAR $8,500 60,000 70,000 BC 7,000 8,000 DURATION OF ANNUITY (YEARS) 12 25 20 2222