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Tanika loaned her friend $ 5 , 0 0 0 . Her friend paid back $ 5 , 0 2 0 at the end of

Tanika loaned her friend $5,000. Her friend paid back $5,020 at the end of the year. This paid the loan in full and included $20 for interest. If the inflation rate for the year was 2 percent, Tanika actually lost purchasing power by making this loan.
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