Problem

Suppose you have:

$$a credit card with a $19\mathrm{.}9\%$ APR with daily compounding, not tax$-$deductible

$$a bank savings account paying $5\%$ EAR, interest income Taxable

$$a car loan with a $4\mathrm{.}8\%$ APR with monthlycompounding. not tax$-$deductible

$$Your income tax rate is $40\%.$

$$The interest on the savings account is taxable, and the interest on the credit card and on the car loan is not tax$-$deductible.

$$What is the effective after$-$tax interest rate of each instrument, expressed as an EAR?

$$What should your priorities be in terms of your financial situation?