Not usually. A "4 percent increase in the interest rate" usually means that there is some reference interest rate of x percent that is increased to 4 + x percent. This means that the interest paid increases from x percent of the principal to 4 + x percent of the principal. Therefore, the interest paid increases by 100 (4/x) %. For example, if a recent Federal funds rate of 1 % in the United States were to be increased by 4 %, the interest paid on any given amount of principal would increase by 400 %!
It means the percent of interest paid annually (p.a. means per annum).
To find interest rate you multiply the price by the time by the percent
The interest paid annually is 700*5/100 = 35
365$ give or take :)