A total of $120 is invested monthly with a 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?
120(1+0.06)+120
The correct calculation to find the principal amount at the beginning of the second month is:
120 + 120(1+0.06)
This calculation adds the original principal amount of $120 to the interest earned on the first month's investment, which is found by multiplying the $120 by the interest rate of 6% (expressed as a decimal) and adding it to the principal amount.