Answer :
Mary lou will have $20574.6 in her savings account when she is ready to enroll in college.
For given question,
Mary lou received $14,000, 7 years prior to her enrolling in college.
She invested the money at 5.5% compounded semiannually.
so the Principal(P) = $14000
Rate (R) = 5.5%
Period(t) = 7 years
First we find the rate of interest in decimal form.
5.5% = 5.5/100
5.5% = 0.055
so, r = 0.055
Using the formula for continuous compound interest,
[tex]\Rightarrow A = Pe^{rt}\\\\\Rightarrow A=14000\times e^{(0.055\times 7)}[/tex]
⇒ A = 14000 × e^(0.385)
⇒ A = 14000 × 1.4696
⇒ A = $20574.6
This means, after 7 years she will have $20574.6 in her saving account.
Therefore, Mary lou will have $20574.6 in her savings account when she is ready to enroll in college.
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