Q1. Layla Ugano wants to select the best one of the four annuities to support her retirement. In every

case, she will pay a single premium today, and will get equal annual end-of-year monetary payment for a

specified years. All annuities have same risk and she does not bother about their different periods. She

will decided only and only on the basis of rate of return on every annuity. The features of the annuity is

given below:

Annuity Name Premium Today in Cash Annual Benefit Life ( In Years)

Sunflower $30,000 $3,100 20

Dandelion $25,000 $3,900 10

Lily $40,000 $4,200 15

Jasmine $35,000 $4,000 12

a. Calculate the rate of return on each of the four annuities. Keep the rate of return nearest to 1%.

b. Which annuity you suggest Ms. Ugano to purchase?