To answer this question, we will use the following formula for monthly compounded interest:
[tex]F=P(1-\frac{r}{12})^{12t},[/tex]where F is the final balance, P is the principal amount, r is the interest rate as a decimal, and t is the number of years.
Substituting P=500, r=0.07, and t=7, we get:
[tex]F=500(1-\frac{0.07}{12})^{12\times7}.[/tex]Simplifying the above result, we get:
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