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(1 + 0.005) + 120
• 120 • 2
O 120(1 + 0.005)2
• 120(1 + 0.06) + 120
The correct calculation to find the principal amount at the beginning of the second month would be:
120(1 + 0.005) + 120