When $70 is invested monthly with an annual compound interest rate of 12% interest, compounded monthly, what is the total amount of the investment at the end of the second month? Round the answer to two decimal places as needed.
The total amount of the investment at the end of the second month, would be what?
To find the total amount of the investment at the end of the second month, we need to calculate the amount after two months of investing $70 with a 12% annual compound interest rate, compounded monthly.
First, let's find the compound interest for each month. The monthly interest rate is given by the annual interest rate divided by 12.
Annual interest rate = 12%
Monthly interest rate = 12%/12 = 1%
After the first month:
Interest = $70 * 1% = $0.70
Total amount after the first month = $70 + $0.70 = $70.70
After the second month:
Interest = $70.70 * 1% = $0.707
Total amount after the second month = $70.70 + $0.707 = $71.40
Therefore, the total amount of the investment at the end of the second month is $71.40.