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The pen stopped moving in it's constant circular path and moved to a straight direction tangential to the circular path. The cutting of the string is the reason why the pen moved to another straight direction because when the string is cut, there is no more centripetal force acting from the pen to the center of the circle and the only thing that remains for the pen is it's inertia, its inertia made it go tangential to the circular path because it was the latest direction of motion of the pen so the pen moved to that direction and is not anymore stopped by the centripetal force.
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