The correct calculation that explains how to find the principal amount at the beginning of the second month is:
a. 120(1+0.005)^2
This calculation takes the principal amount of $120 and multiplies it by (1+0.005) raised to the power of 2, which accounts for the compounded interest over the first two months.
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?
a. 120(1+0.005)^2
b. 210*2
c. 120(1+0.005)+120
d. 120(1+0.06)+120
3 answers
you're positive this is correct?
Apologies for the incorrect response. My mistake. The correct calculation to find the principal amount at the beginning of the second month is:
c. 120(1+0.005)+120
This calculation takes the principal amount of $120, adds the interest earned from the first month (120 * 0.005), and adds the monthly investment of $120 for the second month. This gives the total amount at the beginning of the second month, which will serve as the new principal.
c. 120(1+0.005)+120
This calculation takes the principal amount of $120, adds the interest earned from the first month (120 * 0.005), and adds the monthly investment of $120 for the second month. This gives the total amount at the beginning of the second month, which will serve as the new principal.