Correct Answer - Option 1 : 4%

Given:

S.I.= (2/5) of Principal

Time = 10 years

Formula used:

Amount = P + ( P × R × T)/100

Where P,R and T represents Principal, rate and time respectively.

Calculation:

S.I. = (P × R × T)/100

⇒ (2/5) of P = (P × R × 10)/100

⇒ (2/5) = (R × 10)/100

⇒ (2/5) = (R)/10

⇒ R = 4%

**∴ Rate is 4% per annum.**