1)In 2020, Melinda is a resident of Quebec and earns a gross salary of $100,000 from Bombardier. In her investment portfolio she sold 1,000 of her Spotify shares for $15,000 (she had originally purchased 2,000 shares a few years back for $8,000). She also received taxable dividends of $15,000 (eligible dividends). On October 1, 2020, Melinda made a Registered Retirement Savings Plan (RRSP) contribution of $10,500 which she will claim on her 2020 tax return. On the same day, she also made a contribution to her Tax-Free Savings Account (TFSA) for $2,000. Which statement is false?

a)Melinda's dividends have been grossed-up and are eligible for a dividend tax credit on the $15,000

b)Melinda has capital gain of $7,000

c)Melinda has a taxable capital gain of $5,500

d)Melinda's total income is $120,500

e)Melinda's taxable income is $110,000

2)Larry and his twin sister, Lara both turned nineteen (19) on October 1, 2020 (both are resident of Quebec). On October 15, 2020, they just inherited money ($30,000 each) from their grandfather's estate and want to invest it wisely. Neither really understand how a Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) work and have come to you for guidance on how much they can contribute to the respective accounts on October 22, 2020. (See Table C and D; include catch-up for past years)

Larry: is looking to put the money in a Tax-Free Savings Account (TFSA) and is wondering what the maximum TFSA contribution he can make to his newly opened TFSA account. Any amount remaining from his inheritance, he would like to contribute it to his Registered Retirement Savings Plan (RRSP). Know that Larry worked last summer in 2019 at the bank and made $18,000 but could not get a job in 2020 due to COVID. He has never made a TFSA nor RRSP contribution to date.

Lara: already contributed $1,000 of her birthday money that she received a few weeks ago to her newly opened Tax-Free Savings Account (TFSA,) and is wondering what the maximum TFSA contribution she can now make with the inheritance (if any at all). Any amount remaining from her inheritance, she would like to contribute it to her Registered Retirement Savings Plan (RRSP). Know that Lara has never worked but has an internship lined up for next summer (May 2021) where she will make $13,000. She has never made an RRSP contribution to date.

a)Larry can contribute $12,000 to his TFSA and can contribute $3,240 to his 2020 RRSP; Lara can contribute $12,000 to her TFSA and can contribute $0 to her 2020 RRSP.

b)Larry can contribute $12,000 to his TFSA and can contribute $0 to his 2020 RRSP; Lara can contribute $11,000 to her TFSA and can contribute $0 to her 2020 RRSP.

c)Larry can contribute $6,000 to his TFSA and can contribute $18,000 to his 2020 RRSP; Lara can contribute $0 to her TFSA and can contribute $13,000 to her 2020 RRSP.

d)Larry can contribute $12,000 to his TFSA and can contribute $3,240 to his 2020 RRSP; Lara can contribute $11,000 to her TFSA and can contribute $0 to her 2020 RRSP.

e)Larry can contribute $6,000 to his TFSA and can contribute $3,240 to his 2020 RRSP; Lara can contribute $5,000 to her TFSA and can contribute $2,340 to her 2020 RRSP.

3)Wei is in his first year at Concordia and is aware that credit card companies target university students. He is ready to apply for a credit card but sees that there are many comparators in terms of interest rate, reward points etc. The two companies that have made him credit card offers are the Royal Bank with a nominal interest rate of 23.8%, while CIBC's effective interest rate is 26.86%. Wei also knows that the interest rate on credit cards is compounded daily (365 days), two decimal places. Which statement is false?

a)Credit card interestischargedwhen you don't pay off your full balance by the due date eachmonth.

b)Cash advances can also negatively impact your credit score by increasing how much money you're borrowing relative to your overall credit limit, also known as your credit utilization rate. Generally speaking, you want to limit your overall borrowing amount to get a good credit score, which may be a harder target to hit if you suddenly withdraw a large credit card cash advance.

c)Interest charges on cash advances kick in immediately with no grace period.

d)Both credit cards (Royal Bank and CIBC) have equivalent effective interest rates.

e)The CIBC's credit card interest rate is higher than the Royal Bank's credit card interest rate when comparing effective interest rates.

4)Maria is 30 years old and just started working as a contractor for Microsoft. As a contractor she is paid on the 1^stof each month. Upon receipt of her pay, she immediately contributes $500 to her Tax-Free Savings Account (TFSA). She believes in the Pay Yourself First Method where she takes the money out of her bank account as soon as she is paid and transfers it to her savings before she can spend it. If she continues to do so for the next 35 years, how much will she have accumulated in her TFSA for her retirement? She guesses that she could earn 5% interest compounded weekly over this period of time.

a)$571,434

b)$539,612

c)$504,893

d)$622,925

e)$569,059