Correct Answer - Option 1 : 5%
Given
Simple interest = (1/5) of the sum
Time = 4 years
Formula used
Rate = (simple interest × 100)/(p × 4)
Where, p, r and t are principal, rate and time respectively
Calculation
Rate = [(1/5)P × 100]/(p × 4)
⇒ Rate = 20/4
⇒ Rate = 5%
∴ Rate of interest is 5%.