Since the amount of the money is $7000, then
P = 7000
Since the interest rate is 2.5% and the rate is compounded monthly, then
[tex]\begin{gathered} r=\frac{2.5}{100\times12} \\ r=\frac{1}{480} \end{gathered}[/tex]
Let us use the given rule
[tex]A=P(1+r)^n[/tex]
n is the number of months
A is the total value after the given time
Substitute n by 12 (1 year = 12 months)
[tex]\begin{gathered} A=7000(1+\frac{1}{480})^{12} \\ A=7177.019199 \end{gathered}[/tex]
Round it to the nearest hundredth, then
A = 7177.02 dollars
Since the interest I = A - P, then
[tex]\begin{gathered} I=7177.02-7000 \\ I=177.02 \end{gathered}[/tex]
The interest is $177.02
Answer B
