22. Mary Labatia graduated from York University's School of Administrative Studies with her B.A.S. degree in accounting six months ago. She lives with her parents, who charge her no rent or food costs. She has landed a good job as an accountant for a hotel chain and takes home $3,000 per month after taxes and other deduc- tions. She expects her take-home pay will rise 3% per year for the next few years. She has to start paying off her student loan of $20,000. The interest rate is 4% p.a., compounded monthly, and the amortization period is five years. She wants to buy a car and will have to finance the entire $15,000 purchase price at 4% p.a., com- pounded monthly, with a term of three years. She pays $700 per month for the things her parents don't pay, like transportation, clothes, and entertainment. This cost will rise at 2% p.a. At the end of next year, she will travel to England for her brother's wedding at a total extra cost of $6,000 for clothes, travel, holiday, and gifts. At the end of three years, her vacation entitlement rises to three weeks and she plans a European cruise costing $10,000. She will invest savings at a rate of 3% EAR, taxable at a marginal rate of 30%. (a) What discount rate should Mary use for her savings if she makes the monthly payments on her two loans exactly as scheduled? (b) How much will Mary have saved at the end of three years? (c) What is Mary's correct discount rate? That is, what is the opportunity cost of her money? (d) What does the answer to part (c) tell you that she should be doing with her financial management to be most efficient with her money, while not sacrific- ing any consumption