Question

Your friend tells you that if you let him keep 50 of your Pokemon cards for a month, he will give you 1 card extra

Answer 1

Answer:

0.2682 or 26.82%

Step-by-step explanation:

The monthly interest rate (r) that your friend is willing to pay is:

$r=\frac{1}{50}=0.02$

The following expression converts a monthly interest rate (r) into an annual interest rate (i):

$r=\sqrt[12]{1+i}-1$

For r = 0.02:

$0.02=\sqrt[12]{1+i}-1 \\1.02^{12}-1=i\\i=0.2682$

Your friend is willing to pay an annual rate of 0.2682 or 26.82%.