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)
To find the principal amount at the beginning of the second month, you can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = final amount
P = principal amount (initial investment)
r = annual interest rate (expressed as a decimal)
n = number of times interest is compounded per year
t = number of years
In this case, the monthly interest rate is 6%/12 = 0.005.
Since $120 is invested monthly for the entire first month, the principal amount at the beginning of the second month would be $120.