Republic of the Philippines
University of Cabuyao
(Pamantasan ng Cabuyao)
College of Engineering
Katapatan Mutual Homes, Brgy. Banay-banay, City of Cabuyao, Laguna, Phillippines 4025
PRELIM EXAMINATION
ENGINEERING ECONOMICS
NAME: __________________________________
STUDENT NUMBER: ______________________
NAME OF FACULTY: ______________________
SCORE: __________
SECTION: ________
INSTRUCTIONS: Answer the following questions. Provide your final answer before the number. Show
your solution in a separate sheet and box your final answer in your solution sheet.
TEST I: Problem Solving
1. Determine the ordinary simple interest on P10,000 for 9 months and 15 days if the rate of interest is 6%
2. Determine the exact simple interest on P20,000 for the period from January 15 to November 15, 2012 if
the rate of simple interest is 5%.
3. You loan from a bank the amount of P100,000 with a rate of simple interest of 20% but the interest was
deducted from the loan at the time the money was borrowed. If at the end of 1 year, you have to pay the
full amount of P100,000, what is the actual rate of interest?
4. Mr. Dee Jay borrowed money from the bank and he received the amount of P18,420 and promised to
repay P20,000 at the end of 10 months. Determine the rate of simple interest
5. If P50,000 is borrowed for 90 days at 8% per annum simple interest. How much will be due at the end
of 90 days?
6. On his recent birthday on April 18, 2012, Cai was given by his mother a certain amount of money as
birthday present. He decided to invest the said amount on a 12% exact simple interest. If the investment
will mature on Christmas day at an amount of P15,000, how much did Cai receive from his mother on his
birthday?
7. Carle borrowed money from Cy with simple interest of 12%. Find the present worth of P50,000 which is
due at the end of 6 months.
8. A loan of P5,000 is made for a period of 15 months at a simple interest rate of 15%. What future
amount is due at the end of the loan period?
9. Ciel borrowed P20,000 from the bank and promised to pay the amount after one year. He received the
amount of P19,200 after the bank collected an advance interest of P800. What was the rate of discount
and the rate of interest that the bank collected in advance?
10. You pawned your PSP for P5,000 and agreed to pay the amount at the end of 9 months. The
pawnshop gave you P4,000 cash after deducting the interest in advance. What was the rate of discount?
11.What was the rate of interest for the problem in # 10?
12. If the sum of P15,000 is deposited in an account earning interest at the rate of 8% compounded
quarterly, what will it become at the end of 5 years?
13.An employee has a promissory note, due 5 years hence, whose maturity value is P70,000. If the rate
of interest is 12% compounded semi-annually, what is the value of this note now?
14.IEdeas is planning to expand its operations and plans to purchase a parcel of land on which to
construct a building for their review center, which they will need 5 years hence. The current costs are:
land: P2M; building: P3.5M. Since these are not needed immediately, the company plans to defer the
purchase of the land and the construction of the building until they are needed. If the value of the land and
the cost of the building are expected to appreciate at the rates of 10% and 8% per annum, respectively.
What will be the total cost of the investment after 5 years?
Prepared by:
Reviewed by:
Approved by:
Engr. John Lester Fabello
Signature over printed name
Engr. Vanessa Ici Nieva
Chairperson, Name of Department
Dr. LOUIE LOLONG LACATAN
Dean, College of Engineering
Republic of the Philippines
University of Cabuyao
(Pamantasan ng Cabuyao)
College of Engineering
Katapatan Mutual Homes, Brgy. Banay-banay, City of Cabuyao, Laguna, Phillippines 4025
15.A debt of P150,000 was paid for as follows: P40,000 at the end of 3months, P50,000 at the end of 12
months, P30,000 at the end of 15 months, and a final payment F at the end of 21 months. If the rate of
interest is 12% compounded quarterly, find the final payment F.
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16. Adriste Philippines, Inc. expects to retire an existing machine at the end of 2013 and will replace it
with a new machine for the same task at an estimated cost of P600,000. The old machine can be sold for
P50,000 when it is replaced. To provide for replacement, the company intends to deposit the following
amounts in an account earning interest at 8% compounded quarterly:
P200,000 at the end of 2010
P150,000 at the end of 2011
P100,000 at the end of 2012
What additional amount is needed at the end of 2013 to purchase the new machine?
17.If P500,000 is invested at 8% interest compounded quarterly, how many years will it take for this
amount to accumulate to P900,000?
18.Charlie wishes to bequeath his youngest son P200,000 ten years from now. What amount should he
invest now if it will earn interest of 6% compounded annually during the first 5 years and 8% compounded
quarterly during the next 5 years?
19. Find the nominal rate compounded monthly which is equivalent to 16% compounded quarterly. What
is the corresponding effective rate?
20.What payment X 10 years from now is equivalent to a payment of P500,000 7 years from now, if
interest rate is 12% compounded semi-annually?
Prepared by:
Reviewed by:
Approved by:
Engr. John Lester Fabello
Signature over printed name
Engr. Vanessa Ici Nieva
Chairperson, Name of Department
Dr. LOUIE LOLONG LACATAN
Dean, College of Engineering
Republic of the Philippines
University of Cabuyao
(Pamantasan ng Cabuyao)
College of Engineering
Katapatan Mutual Homes, Brgy. Banay-banay, City of Cabuyao, Laguna, Phillippines 4025
Prepared by:
Reviewed by:
Approved by:
Engr. John Lester Fabello
Signature over printed name
Engr. Vanessa Ici Nieva
Chairperson, Name of Department
Dr. LOUIE LOLONG LACATAN
Dean, College of Engineering