Question

A man pays 40 times the annual rent to purchase a building. The rate % per annum he derives from his investment is

• A. \(25%\)
• B. \(2.5%\)
• C. \(50%\)
• D. \(5%\)
• E. \(7.5%\)

Answer 1

The Correct Option is B

Concept: \[ \text{Rate} = \frac{\text{Annual income}}{\text{Investment}} \times 100 \]
Step 1: Assume annual rent.
Let rent = 1 \[ \text{Cost of building} = 40 \]
Step 2: Find rate.
\[ \text{Rate} = \frac{1}{40} \times 100 = 2.5% \]
Step 3: Option analysis.

• (A) 25%: Incorrect $\times$
• (B) 2.5%: Correct \checkmark
• (C) 50%: Incorrect $\times$
• (D) 5%: Incorrect $\times$
• (E) 7.5%: Incorrect $\times$

Conclusion:
Thus, the correct answer is
Option (B).