a and b

Your best friend consults you for investment advice. You learn that his tax rate is 33%, and he has the following current investments and debts: A car loan with an outstanding balance of $5,000 and a 4.71% APR (monthly compounding) Credit cards with an outstanding balance of $10,000 and a 14.94% APR (monthly compounding) A regular savings account with a $30,000 balance, paying a 5.45% effective annual rate (EAR) A money market savings account with a $100,000 balance, paying a 5.22% APR (daily compounding) A tax-deductible home equity loan with an outstanding balance of $25,000 and a 5.06% APR (monthly compounding) a. Which savings account pays a higher after-tax interest rate? b. Should your friend use his savings to pay off any of his outstanding debts? Your best friend consults you for investment advice. You learn that his tax rate is 33%, and he has the following current investments and debts: A car loan with an outstanding balance of $5,000 and a 4.71% APR (monthly compounding) Credit cards with an outstanding balance of $10,000 and a 14.94% APR (monthly compounding) A regular savings account with a $30,000 balance, paying a 5.45% effective annual rate (EAR) A money market savings account with a $100,000 balance, paying a 5.22% APR (daily compounding) A tax-deductible home equity loan with an outstanding balance of $25,000 and a 5.06% APR (monthly compounding) a. Which savings account pays a higher after-tax interest rate? b. Should your friend use his savings to pay off any of his outstanding debts