Question

A total of $120 is invested monthly with an annual compound interest rate of 6%, compounded monthly. Which of the following calculations explains how you can find the principal amount at the beginning of the second month?(1 point)Responses120⋅2120 times 2120(1+0.06)+120120 left parenthesis 1 plus 0.06 right parenthesis plus 120120(1+0.005)+120120 left parenthesis 1 plus 0.005 right parenthesis plus 120120(1+0.005)2

Answer 1

[AI-generated answer — Bot GPT 3.5]

To find the principal amount at the beginning of the second month, you can use the formula:

Principal amount at the beginning of the second month = $120 * (1 + 0.005)^2 + $120

Therefore, the correct calculation is: 120(1+0.005)^2