Final answer:
Using the simple interest formula I = PRT, we calculate that the interest rate for the $4000 loan with $840 interest over 3 years is 7%, corresponding to option C.
Step-by-step explanation:
To find the interest rate, we can use the formula for simple interest: I = PRT, where I is the interest, P is the principal, R is the interest rate, and T is the time in years. Plugging in the given values, we find that the interest rate is 7%.
To determine the interest rate for the given simple interest scenario, we can use the simple interest formula: I = PRT, where I is the interest, P is the principal amount, R is the rate of interest per year, and T is the time in years.
In this case, the interest (I) is $840, the principal (P) is $4000, and the time (T) is 3 years. We need to find the rate (R). Plugging the known values into the equation, we get: $840 = $4000 × R × 3. To find R, divide both sides by $4000 and then by 3: R = $840 / ($4000 × 3).
After calculating, we find that R = 0.07, or 7%.
Therefore, the interest rate is 7%, which corresponds to option C.