The volume \( V \) of a rectangular pyramid is calculated using the formula:
\[ V = \frac{1}{3} \times \text{base area} \times \text{height} \]
For a square pyramid, the base area \( A \) can be calculated as:
\[ A = \text{side length}^2 \]
In this case, the side length is 16 miles, so:
\[ A = 16^2 = 256 \text{ square miles} \]
The height \( h \) of the pyramid is given as 8 miles. Now we plug the base area and height into the volume formula:
\[ V = \frac{1}{3} \times 256 \times 8 \]
Calculating this step-by-step:
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Multiply the base area by the height:
\[ 256 \times 8 = 2048 \]
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Now calculate the volume:
\[ V = \frac{1}{3} \times 2048 = \frac{2048}{3} \approx 682.6667 \]
Rounding to the nearest hundredth, the volume of the pyramid is:
\[ \boxed{682.67} \text{ mi}^3 \]