Answer
The annual interest rate is 0.06, or 6%.
Work Step by Step
The interest formula is: I = P $\times$ r $\times$ t
To find the annual interest rate, or r, we divide I by P $\times$ t
So, r = $\frac{I}{P\ \times\ t}$
I = 1260
P = 7000
t = 3
Substitute these values in the formula to obtain:
r = $\frac{1260}{7000\ \times\ 3}$
r = $\frac{1260}{21000}$
r = 0.06
The annual interest rate is 0.06, or 6%.
