Answer:
The interest rate is 20%.
Step-by-step explanation:
In order to calculate the interest rate, we need to compute how many percents the value he recieves is related to the total he invested. In this case he recieves 40 every year and he invested 200, to calculate that we will apply a rule of three. We have:
$200 -> 100%
$40 -> x%
200/40 = 100/x
200*x = 40*100
200*x = 4000
x = 4000/200 = 20
The interest rate is 20%.
