In: Finance
18. Betty White is ready to retire and would like to buy an annuity that would guarantee her afixed income. The annuities are as follows:
Annuity: Cost of Annuity: Annual Annuity Payment: Duration of Annuity(years)
A $50,000 $8,500 12
B $60,000 $7,000 25
C $70,000 $8,000 20
Question: Alternatively, Betty could earn 11 percent on her money by placing it in a savings account. What should she do with her money?
A) Purchase Annuity A B) Purchase Annuity B C) Purchase Annuity C D) Place her money in a savings account
16. The time value of money is primarily about inflation. A) True B) False