Determine the tax free savings account

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-Julie Cowieson's grandmother gave her $10,000. Julie wants to buy a car in three years that she expects will cost about $25,000. If she earns 1.5% p.a. in her Tax Free Savings Account, how much more will she need to borrow to buy the car?

-Isabelle Salehoun won a lottery!!! She has a choice of two ways to get paid her winnings:

Option a: $1 million today, or

Option b: $40,000 end of every year for life. An insurance company guarantees the payments.

If she expects to earn 3.8% on her investment of the $1 million and her average life expectancy is 60 years from today, which payment method is worth more?

Reference no: EM132670138

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