Helena, age 42, needs $5,000 to buy a car. Her marginal tax rate is 30%. Her RRSP is expected to earn 5% per year over the next 23 years until she retires. If she decides to withdraw the money from her RRSP to purchase the car:

1.How much money does she need to withdraw to buy the car?

2.How much tax will be withheld at the bank when she withdraws the money?

3.How much additional tax will she owe at the end of the year?

4.What is the actual cost of the car if she makes a withdrawal from her RRSP to purchase the car?

5.What other option(s) might you recommend to Helena?