Explanation:
Step 1 :
Given that,
The Principal amount invested, P = $2400
The Simple interest earned = $ 42
The period of duration, n = 3 months = 3/12 year
step 2 :
To find the annual interest rate,
Simple interest = Pnr / 100
42 = (2400(3/12)r) / 100
42 = 7200r / (1200)
r = (42*1200) / 7200
r = 50400 / 7200
= 7%
∴ The annual interest rate is 7%