Seven months ago Julie received some money for her birthday and she immediately deposited it into an account earning 6.5%. Today the value of that deposit has reached $4,259.88. How much did she deposit 7 months ago?

Question

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To find the original amount deposited by Julie, we need to calculate the principal amount that, when interest is applied for 7 months at a 6.5% annual rate, results in a final amount of $4,259.88. The formula for compound interest (which is likely applicable here given the standard approach to interest calculation) is A = P(1 + r/n)^(nt), where A is the amount of money accumulated after n years, including interest, P is the principal amount, r is the annual interest rate (decimal), n is the number of times that interest is compounded per year, and t is the time the money is invested for in years.However, since the specific compounding frequency isn't given, and given the nature of the question, a simpler approach through direct proportion assuming simple interest might be more appropriate or intended, especially considering the options provided and the short time frame of 7 months. For simple interest, the formula simplifies to A = P(1 + rt), where r is the annual interest rate as a decimal, and t is the time in years.Rearranging the formula to solve for P gives us P = A / (1 + rt). Given that t = 7/12 years (to convert months into years), r = 6.5% = 0.065, and A = $4,259.88, we can solve for P.P = $4,259.88 / (1 + 0.065*(7/12)) = $4,259.88 / (1 + 0.037708333) ≈ $4,104.26.Therefore, Julie originally deposited approximately $4,104.26.

Seven Months Ago Julie Received Some Money for Her Birthday