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)

120/2

120(1 + 0.005) + 120

120 * (1 + 0.005) ^ 2

120(1 + 0.06) + 120

The correct calculation is:

120 * (1 + 0.005) ^ 2