Answer:
2 %
Step-by-step explanation:
Money borrowed, Principal, P = $ 700 
time of investment, T = 3 years 
Total interest paid, Simple interest, S.I = $ 42 
Let the rate of interest is R. 
Use the formula for simple interest. 

By substituting the values 

4200 = 2100 R 
R = 2 % 
Thus, the rate of interest is 2%.