How much would a person need to deposit into a savings account to generate $1,000 per month for one year if annual simple interest rates are 5%?

Question

Quizplus · Accepted Answer

To generate $1,000 per month for one year, the total amount needed would be $12,000. Using the formula:

Interest = (Principal x Rate x Time) / 100

we can rearrange to solve for the principal (P):

P = (Interest x 100) / (Rate x Time)

Plugging in the values, we get:

P = ($12,000 x 100) / (5 x 1) = $240,000

Therefore, the person would need to deposit $240,000 into their savings account to generate $1,000 per month for one year.

How Much Would a Person Need to Deposit into a Savings