A person borrows some money for 2 years at a certain rate of simple interest. If the ratio of principal and total interest is 5 : 4, then what is the annual rate of interest?

Correct option is B

Given:

• Time = 2 years
• Ratio of Principal : Total Interest = 5 : 4
• Need to find the annual rate of interest

Formula Used:

​$$\text{SI} = \frac{\text{Principal} \times \text{Rate}}{100}$$​​

Solution:

Total Amount = Principal + Interest

From the ratio:

Principal : Interest = 5 : 4,
So, let Principal = ₹5 and Interest = ₹4

Using the formula:

SI = (P × R × T) / 100

Substitute values:

4 = (5 × R × 2) / 100
=> 4 = (10R) / 100
=> 4 × 100 = 10R
=> 400 = 10R
=> R = 40

Final Answer: (B) 40 percent