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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

when he returns your cards.

What is the annual rate of interest he is willing to pay for the borrowed cards?

Note: Even though he only keeps your cards for a month, we can still calculate an annual interest rate.

%

Respuesta :

pedrocarratore

Answer:

0.2682 or 26.82%

Step-by-step explanation:

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

[tex]r=\frac{1}{50}=0.02[/tex]

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

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

For r = 0.02:

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

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

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