Thabo wanted to buy some household items that were on sale but did not have enough money. He needed R5 000 and had the following options available to him: Option 1: A friend agreed to lend Thabo the money at a simple interest rate of 15% per annum for a period of two years. Option 2: Thabo could borrow the money from a mashonisa (a loan shark) who will charge him 5% compound interest per month also for a two year period. Thabo decided to go with option 2 as the interest rate was lower than what his friend offered him. Did Thabo make the correct decision?