Question 3: Accumulating savings (25 marks) Ethan is a registered nurse working at a long-term home. His annual gross salary is $70,000 (before tax). He has recently attended a seminar on how to use a Tax-Free Savings Account (TFSA). Ethan is already contributing to a Defined Contribution pension at work; however, he wants to save more for retirement. He will use a TFSA, as the investment income earned in a TFSA is not taxed. Ethan has just completed a specialist designation. Effective immediately his salary will increase by 20%. After this increase, his salary will increase by 3% for all subsequent years. Assume that the tax on all salary income is 25%. Ethan plans to save the following at the end of each year: 5% of after tax salary for the next 15 years, then increase the annual savings to 10% of after tax salary for the remaining years. Ethan will earn 7% p.a. on his savings. *Ignore contribution limits for TFSA. Required: How much will Ethan have saved in his TFSA after 15 years? (10 marks) bi How much will Ethan have saved in the TFSA after 20 years? (10 marks) . If the inflation rate is 2% p.a. for every year, what is the real value of the TFSA balance (use balance calculated in part b), in today's dollars