Answer:
4%
Explanation:
The formula for simple interest is I = Prt, where I is the interest, P is the principal amount, r is the interest rate, and t is the time in years.
In this case, we know that:
P = £500 (the principal amount)
I = £40 (the interest earned)
t = 2 years (the time the money was invested)
We can rearrange the formula to solve for r:
r = I / Pt
Substituting the given values, we get:
r = 40 / (500 x 2)
r = 0.04 or 4%
Therefore, the simple interest rate per annum is 4%.