You can copy files to a folder using the following steps.
In one of the navigation views, select the .txt file.
From the file's context menu, select Copy (or Ctrl+C)
From the folder's context menu, select Paste (or Ctrl+V).
As an alternative to copying files using the copy operation, it is also possible to copy files by holding down the Ctrl key while dragging a file from one folder to another folder. (On macOS, the ⌥ key is used for this.)
Once the file has been copied it can be renamed.