Question
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
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:
| Annuity | Initial Payment Into Annuity (At t= 0) | Amount of Money Received Per Year | Duration Of Annuity (Years) |
| A | $50,000 | $8,500 | 12 |
| B | $60,000 | $7,000 | 25 |
| C | $70,000 | $8,000 | 20 |
If 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?
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Entrepreneurship
Authors: Andrew Zacharakis, William D Bygrave
5th Edition
1119563097, 9781119563099
