If Sasha wants her account to be worth $1,000 in 5 years, then she must deposit $833.34.
<h3>What is simple interest?</h3>
Simple interest is a method of calculating interest on an amount for n period of time with a rate of interest of r. It is calculated with the help of the formula,
SI = PRT
where SI is the simple interest, P is the principal amount, R is the rate of interest, and T is the time period.
Sasha's bank account earns 4% simple interest. Therefore, if she wants it to be worth $1,000 in 5 years then the principal amount must be,
Account balance = PRT + P
$1,000 = P[(0.04×5)+1]
$1,000 = 1.2 P
P = $833.34
Hence, if Sasha wants her account to be worth $1,000 in 5 years, then she must deposit $833.34.
Learn more about Simple Interest:
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