Q.If the total interest on a principal amount in 4 years is \(\cfrac{1}{5}\) of the principal, the annual rate of interest is: (a) 4% (b) 5% (c) 10% (d) 20%
Answer: B
Assume the principal \(p = x\) rupees.
Time \(t = 4\) years.
Interest \(I = \frac{x}{5}\) rupees.

Therefore, the rate of interest \(r = \frac{100 \times I}{p \times t} \%\)
\(= \frac{100 \times \frac{x}{5}}{x \times 4} \% = \frac{20x}{4x} \% = 5\%\).
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