you lend a friend 10,000 dollars for which your friend will repay you 27,027 dollars at the end of 5 years. What interest rate are you charging your friend?

The interest rate is "21.999%".

Explanation:

The given values are:

Amount lent,

= 10,000

Amount repaid,

= 27,027

Years (n),

= 5

As we know,

⇒  

On substituting the given values, we get

⇒                

⇒                  

⇒                

⇒                

⇒                

On subtracting "1" from both sides, we get

⇒            

⇒                      

i.e.,

⇒                      

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.