Make Magento “Continue Shopping” button redirect to the last-added-to-cart product's category

Copy following file 

 /app/code/core/core/Mage/Checkout/Block/Cart.php  

and place under local codepool 

app/code/core/local/Mage/Checkout/Block/Cart.php 

Update the following code into function getContinueShoppingUrl() 

public function getContinueShoppingUrl()
    {
      /*
        $url = $this->getData('continue_shopping_url');
        if (is_null($url)) {
            $url = Mage::getSingleton('checkout/session')->getContinueShoppingUrl(true);
            if (!$url) {
                $url = Mage::getUrl();
            }
            $this->setData('continue_shopping_url', $url);
        }
        return $url;
      */
       
            $lastProductAddedToCartId = Mage::getSingleton('checkout/session')->getLastAddedProductId();
            if($lastProductAddedToCartId) {
            $productCategoryIdsArray = Mage::getModel('catalog/product')->load($lastProductAddedToCartId)->getCategoryIds();
            $continueShoppingCategoryUrl = Mage::getModel('catalog/category')->load($productCategoryIdsArray[0])->getUrl();
            }
  
            return $continueShoppingCategoryUrl;
    }

Enjoy the work!!