sonal Finance (Winter 2020-2 Midterm Exam Informati Kelly, aged 41, is in serious trouble with debt. He owes money on two credit cards: he owes $10,000 on one card charging 14% p.a. interest, $7,500 on another card charging 18% p.a. interest. His line of credit with the bank is maxed out at $30,000 with interest charged at 8% p.a. and his car loan is currently $28,000 at 9% p.a. His car is worth $30,000 but the loan requires monthly payments and has a 7 year term. He borrowed another $10,000 from his brother who has agreed not to charge him any interest but wants the money back in 4 months. Kelly started drinking heavily because of his debt troubles and the drinking cost him his job as a courier. He now has casual work for a ride-share company but can only work 8 hours a day because his Tesla car needs recharging. He now earns about $3,500 a month after tax and has living expenses of $3000 a month (excluding debt repayments). Kelly has been offered the option of consolidating his debt at 6% p.a. interest rate with monthly payments. The term of the loan is 10 years. He has come to you for advice. Required: 1) Advise Kelly on whether or not he should consolidate his debt using calculations to support your discussion. (6 marks) 2) Explain one other debt management/relief option and if it suits Kelly. (4 marks) 7 A B I x USX2 1) kelly should consolidate his debt because