Answer:
$39,782
Explanation:
The balance at the end of 12 years will be the annuity value after 12 years.
the appropricate formulat for the annuity is
PV = P × 1 − (1+r)−n
r
For Olfert Contractors
PV is future value
P is $958
r is 6% or 0.06 % per year or 0.005 per month
n is 12 year or 144 compund periods
FV = 958 x 1-(1+0.005)144
0.005
FV = 958 x (1-0.487626284)
0.005
FV = 958 x 0.512373716/0.005
FV = 958 x 102. 2747
FV = 98, 170.00
Without the interest factor Olfert Contractors will contribute 958 per month for 12 years which will be
=958 x 12 x 12
=$137,952
The interest on maturity value will be
=$137,952 - $98,170
=$39,782
