This is often taught at school. I looked into it but it appears to be only partially true. The preterite of saber can mean "found out" but that's not the only meaning possible. I don't know that it would be the mostly likely meaning in this particular sentence.
This article has been helpful in understanding this. "Preterite/Imperfect Half-Truths:Problems with Spanish Textbook Rules for Usage"
"While it is not harmful to state that saber in the preterite is ofen expressed in English as "found out," etc., it is crucial to stress that these verbs are not unlike "normal" verbs when used in the preterite. In each case, the preterite of "meaning-change" verbs focuses on the beginning or the end of the action or state just as it does with "normal" verbs (Principles 2a and 2b). However, the contention that "some verbs take on a special meaning in the preterite" is misleading because it suggests that the changes in meaning always occur. In reality, they do not apply in all contexts."
definitely. Four years after your salient comment, could is still not accepted. 'She knew how to read' has some meaning, but sounds strange. I remember from French at school that savoir was used for having an ability, surely the same with saber in Spanish. 'She could read' has a real meaning: 'she knew how to read' sounds at best sarcastic. Come on Duolingo, sort this out!!!
And a further three months later I answered "She could read" , by which I meant "she knew how to read", and I was surprised it wasn´t accepted. Afterwards I realized that "She could read" may be ambiguous.
"The poor girl! Internet is down, she has nobody to play with and there is a snowstorm outside! What is she going to do?"
"She could read." (Ella podia leer.)
saber means to know how to
poder means to be able to
Both can be translated as can, but they mean different things:
Ella sabe leer, pero no puede leer, porque ella perdió la visión recientemente.
She can (=knows how to) read, but she cannot (=is unable to) read, because she lost her sight recently.