Your best friend consults you for investment advice. You learn that his tax rate is

$40\%40\%,$

and he has the following current investments and$$ debts:

bullet$$

A car loan with an outstanding balance of

$$$$5$ comma $0005,000$

and a

$4\mathrm{.}79\%4\mathrm{.}79\%$

APR$($monthly compounding$)$

bullet$$

Credit cards with an outstanding balance of

$$$$10$ comma $00010,000$

and a

$14\mathrm{.}99\%14\mathrm{.}99\%$

APR$($monthly compounding$)$

bullet$$

A regular savings account with a

$$$$30$ comma $00030,000$

$$balance$,$ paying a

$5\mathrm{.}58\%5\mathrm{.}58\%$

effective annual rate$($EAR$)$

bullet$$

A money market savings account with a

$$$$100$ comma $000100,000$

$$balance$,$ paying a

$5\mathrm{.}16\%5\mathrm{.}16\%$

APR$($daily compounding$)$

bullet$$

A$$ tax$-$deductible home equity loan with an outstanding balance of

$$$$25$ comma $00025,000$

and a

$5\mathrm{.}08\%5\mathrm{.}08\%$

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?