The value of a collector’s item is expected to increase exponentially each year. The item is purchased for $500 and its value increases at a rate of 5% per year. Find the value of the item after 4 years.

For exponential growth, multiply the starting value by (1 + the annual rate) for each year: $500 × 1.05⁴ = $607.753125. Rounded to the nearest cent, the item will be worth $607.75 after 4 years, which is choice B.

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