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 in the popup window:

ANNUITY	INITIAL PAYMENT INTO ANNUITY (AT t = 0)	AMOUNT OF MONEY RECEIVED PER YEAR	DURATION OF ANNUITY (YEARS)
A	60000	7500	25
B	50000	8000	10
C	70000	9000	20

If Nicki 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?

What rate of return could Nicki earn on her money if she place it in annuity A with $7,500 payment per year and 25 years duration?