Answer:
0.2682 or 26.82%
Explanation:
The monthly interest rate (r) that your friend is willing to pay is:

The following expression converts a monthly interest rate (r) into an annual interest rate (i):
![r=\sqrt[12]{1+i}-1](https://img.qammunity.org/2021/formulas/mathematics/college/90o14hxd7bd0r3d0vhqbhf9kqurbuycffh.png)
For r = 0.02:
![0.02=\sqrt[12]{1+i}-1 \\1.02^(12)-1=i\\i=0.2682](https://img.qammunity.org/2021/formulas/mathematics/college/vxnl5nqj2azc4u1cutztgaz9mrxa2oj8rn.png)
Your friend is willing to pay an annual rate of 0.2682 or 26.82%.