When 70 dollars is invested monthly with an annual compound interest rate of 12% compounded monthly what is the total amount of the investment at the end of the second month? round it the answer to two decimal places as needed.

Answer 1

To find the total amount of the investment at the end of the second month, we can use the compound interest formula:

A = P(1 + r/n)^(nt)

Where:
A = the final amount
P = the monthly investment
r = the annual interest rate
n = the number of times the interest is compounded per year
t = the number of years

In this case,
P = $70
r = 12% = 0.12
n = 12 (compounded monthly)
t = 2/12 = 1/6 (since we want to find the amount after 2 months)

A = 70(1 + 0.12/12)^(12 * 1/6)
A = 70(1 + 0.01)^(2)
A = 70(1.01)^2
A = 70(1.0201)
A = 70 * 1.0201
A ≈ $71.407

Rounded to two decimal places, the total amount of the investment at the end of the second month is approximately $71.41.