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Annuities and Uniform Gradient
Engineering economy (Eastern Visayas State University)
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lOMoARcPSD|25737205
Review in Engineering Economy - Annuities
1. Today, a businessman borrowed money to be paid
in 10 equal payments for 10 quarters. If the
interest rate is 10% compounded quarterly and
the quarterly payment is P2,000, how much did he
borrow?
A. P17,304.78
B. P17,404.12
C. P17,504.13
D. P17,604.34
Solution:
A. P838.86
B. P849.12
Solution:
2. What annuity is required over 12 years to equate
with a future amount of P20,000? Assume i = 6%
annually.
A. P1,290.34
B. P1,185.54
C. P1,107.34
D. P1,205.74
Solution:
3. A man loans P187,400 from a bank with interest
at 5% compounded annually. He agrees to pay his
obligations by paying 8 equal annual payments,
the first being due at the end of 10 years. Find
the annual payments.
A. P43,600.10
B. P43,489.47
1
4. Engr. Sison borrows P100,000.00 at 10% effective
annual interest. He must pay back the loan over
30 years with uniform monthly payment due on the
first day of each month. What does Engr. Sison
pay each month?
C. P43,263.91
D. P43,763.20
Solution:
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C. P850.12
D. P840.21
lOMoARcPSD|25737205
Review in Engineering Economy - Uniform Gradient
2
1. An investment consisting of deposits of P1,000,
P1,500 and P2,000 are made at the end of the 2nd
year, 3rd year and 4th year, respectively. If
money is worth 10%, what is the equivalent
present worth of the investment?
A. P3,129.89
B. P3,319.45
C. P3,372.12
D. P3,490.09
Solution:
2. Engr. Hermo, believing that life begins at 40,
decided to retire and start enjoying life at age
40. He wishes to have upon his retirement the
sum of P5,000,000. On his 21st birthday, he
deposited a certain amount and increased his
deposit by 15% each year until he will be 40. If
the money is deposited in a super savings
account which earns 15% interest compounded
annually, how much was his initial deposit?
A. P17,253.18
B. P17,566.33
Solution:
Alternate Solution:
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C. P17,672.77
D. P17,490.21