GEAS MCQs

MCQs in Engineering Economics Part XI

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This is the Multiples Choice Questions Part 11 of the Series in Engineering

Economics as one of the General Engineering and Applied Sciences (GEAS)
topic. In Preparation for the ECE Board Exam make sure to expose yourself
and familiarize in each and every questions compiled here taken from various
sources including past Board Questions in General Engineering and Applied
Sciences (GEAS), Engineering Economy Books, Journals and other
Engineering Economy References.
Online Questions and Answers in Engineering Economics Series

Following is the list of multiple choice questions in this brand new series:

Engineering Economics MCQs

PART 1: MCQs from Number 1 50 Answer key: PART I

PART 2: MCQs from Number 51 100 Answer key: PART II

PART 3: MCQs from Number 101 150 Answer key: PART III

PART 4: MCQs from Number 151 200 Answer key: PART IV

PART 5: MCQs from Number 201 250 Answer key: PART V

PART 6: MCQs from Number 251 300 Answer key: PART VI

PART 7: MCQs from Number 301 350 Answer key: PART VII

PART 8: MCQs from Number 351 400 Answer key: PART VIII

PART 9: MCQs from Number 401 450 Answer key: PART IX

SEE: More Questions and Answers in Engineering Economics

PART 11: MCQs from Number 501 550 Answer key: PART XI

Continue Practice Exam Test Questions Part XI of the Series

Choose the letter of the best answer in each questions.
501. On her recent birthday, April 22, 2001, Nicole was given by her mother a
certain sum of money as birthday present. She decided to invest the said
amount on 20% exact simple interest. If the account will mature on Christmas
day at an amount of P10,000.00, how much did Nicole receive from her mother
on her birthday?
A. P8,807.92
B. P8,827.56
C. P8,832.17
D. P8,845.78
502. What is the ordinary interest on P1,500.50 for 182 days at 5.2%?
A. P39.01
B. P39.45
C. P39.82
D. P39.99
503. Nicole has P20,400 in cash. She invested it at 7% from March 1, 2006 to
November 1, 2006 at 7% interest. How much is the interest using the Bankers
Rule?
A. P972.12
B. P970.78
C. P973.12
D. P971.83
504. The amount of P20,000 was deposited in a bank earning an interest of
6.5% per annum. Determine the total amount at the end of 7 years if the
principal and interest were not withdrawn during this period?
A. P30,890.22
B. P30,980.22
C. P31,079.73
D. P31,179.37
505. A loan for P50,000 is to be paid in 3 years at the amount of P65,000. What
is the effective rate of money?
A. 9.01%
B. 9.14%
C. 9.31%
D. 9.41%
506. The amount of P50,000 was deposited in the bank earning an interest of
7.5% per annum. Determine the total amount at the end of 5 years, if the
principal and interest were not withdrawn during the period.
A. P71,781.47
B. P71,187.47
C. P71,817.47
D. P71,718.47
507. Find the present worth of a future payment of P80,000 to be made in six
years with an interest of 12% compounded annually.
A. P40,540.49
B. P40,450.49
C. P40,350.49
D. P40,530.49
508. What is the effective rate corresponding to 18% compounded daily? Take
1 year is equal to 360 days.
A. 19.61%
B. 19.44%
C. 19.31%
D. 19.72%
509. What nominal rate, compounded semi-annually, yields the same amount
as 16% compounded quarterly?
A. 16.09%
B. 16.32%
C. 16.45%
D. 16.78%
510. What rate of interest compounded annually is the same as the rate of
interest of 8% compounded quarterly?
A. 8.07%
B. 8.12%
C. 8.16%
D. 8.24%
511. Find the nominal rate, which if converted quarterly could be used instead
of 12% compounded semi-annually.
A. 11.83%
 B. 11.09%
C. 11.65%
D. 11.25%
512. Which of these gives the lowest effective rate of interest?
A. 12.35% compounded annually
B. 11.90% compounded semi-annually
C. 12.20% compounded quarterly
D. 11.60% compounded monthly
513. Find the compound amount if P2,500 is invested at 8% compounded
quarterly for 5 years and 6 months.
A. P3,864.95
B. P3,846.59
C. P3,889.95
D. P3,844.95
514. An amount of P1,000 becomes P1,608.44 after 4 years compounded
bimonthly. Find the nominal interest.
A. 11.89%
B. 12.00%
C. 12.08%
D. 12.32%
515. If P5,000 shall accumulate for 10 years at 8% compounded quarterly, then
what is the compound interest at the end of 10 years?
A. P6,080.40
B. P6,020.40
C. P6,040.20
D. P6,060.20
516. What is the corresponding effective rate of 18% compounded semi-
quarterly?
A. 19.24%
B. 19.48%
C. 19.84%
D. 19.92%
517. Find the present worth of a future payment of P100,000 to be made in 10
years with an interest of 12% compounded quarterly.
 A. P30,555.68
B. P30,656.86
C. P30,556.86
D. P30,655.68
518. In how many years is required for P2,000 to increase by P3,000 if interest
at 12% compounded semi-annually?
A. 7.86 years
B. 7.65 years
C. 7.23 years
D. 8.12 years
519. The amount of P150,000 was deposited in the bank earning an interest of
7.5% per annum. Determine the total amount at the end of 5 years, if the
principal and interest were not withdrawn during the period.
A. P215,344.40
B. P213,544.40
C. P234,153.40
D. P255.443.10
520. How long will it take money to double itself if invested at 5% compounded
annually?
A. 13.7 years
B. 14.2 years
C. 14.7 years
D. 15.3 years
521. What is the corresponding effective interest rate of 18% compounded
semi-monthly?
A. 19.35%
B. 19.84%
C. 19.48%
D. 19.64%
522. What is the effective rate of 14% compounded semi-annually?
A. 14.49%
B. 14.59%
C. 14.69%
D. 14.79%
523. At an interest rate of 10% compounded annually, how much will a deposit
of P1,500 be in 15 years?
A. P6,265.87
B. P6,256.78
C. P6,526.87
D. P6,652.78
524. A man expects to receive P25,000 in 8 years. How much is that money
worth now considering interest at 8% compounded quarterly?
A. P13,256.83
B. P13,655.28
C. P13,625.83
D. P13,265.83
525. About how many years will P100,000 earn a compound interest of P50,000
if the interest rate is 9% compounded quarterly?
A. 4 years
B. 5 years
C. 6 years
D. 7 years
526. Compute the equivalent rate of 6% compounded semi-annually to a rate
compounded quarterly.
A. 5.12%
B. 5.96%
C. 5.78%
D. 6.12%
527. What is the amount of P12,800 in 4 years at 5% compounded quarterly?
A. P15,461.59
B. P15,146.95
C. P15,641.59
D. P15,614.59
528. By the condition of a will, the sum of P20,000 is left to a girl to be held in
trust fund by her guardian until it amounts to P50,000. When will the girl receive
the money if the fund is invested at 8% compounded quarterly?
A. 11.23 years
B. 11.46 years
 C. 11.57 years
D. 11.87 years
529. If P50,000 shall accumulate for 10 years at 4% compounded quarterly, find
the compounded interest at the end of 10 years.
A. P2,333.32
B. P2,444.32
C. P2,555.32
D. P2,666.32
530. A sum of P1,000 is invested now and left for eight years, at which time the
principal is withdrawn. The interest has accrued is left for another eight years. If
the effective annual interest rate is 5%, what will be the withdrawal amount at
the end of the 16th year.
A. P693.12
B. P700.12
C. P702.15
D. P705.42
531. P1,500.00 was deposited in a bank account, 20 years ago. Today, it is
worth P3,000.00. Interest is paid semi-annually. Determine the interest rate paid
on this account.
A. 2.9%
B. 3.0%
C. 3.2%
D. 3.5%
532. A merchant puts in his P2,000.00 to a small business for a period of six
years. With a given interest rate on the investment of 15% per year,
compounded annually, how much will he collect at the end of the sixth year?
A. P4,626.12
B. P4,262.12
C. P4,383.12
D. P4,444.12
533. A man borrowed P100,000 at the interest rate of 12% per annum,
compounded quarterly. What is the effective rate?
A. 12.75%
B. 12.55%
 C. 12.45%
D. 12.35%
534. Mandarin Bank advertises 9.5% account that yields 9.84% annually. Find
how often the interest is compounded.
A. Monthly
B. Bimonthly
C. Quarterly
D. Annually
535. When will an amount be tripled with an interest of 11.56%?
A. 9 years
B. 10 years
C. 11 years
D. 12 years
536. A student plans to deposit P1,500.00 in the bank now and another
P3,000.00 for the next 2 years. If he plans to withdraw P5,000.00 three years
from after his last deposit for the purpose of buying shoes, what will be the
amount of money left in the bank after one year of his withdrawal? Effective
annual interest rate is 10%.
A. P1,549.64
B. P1,459.64
C. P1,345.98
D. P1,945.64
537. How much must be invested on January 1, 1998 in order to accumulate
P2,000 on January 1, 2003? Money is worth 6%.
A. P1,509.34
B. P1,249.64
C. P1,378.98
D. P1,494.52
538. A nominal interest of 3% compounded continuously is given on the
account. What is the accumulated amount of P10,000 after 10 years?
A. P13,498.59
B. P13,489.59
C. P13,789.98
D. P13,494.52
539. A mechanical engineer wishes to accumulate a total of P10,000 in a
savings account at the end of 10 years. If the bank pays only 4% compounded
quarterly, what should be the initial deposit?
A. P6,176.35
B. P6,761.35
C. P6,716.53
D. P6,167.35
540. Funds are deposited in a savings account at an interest of 8% per annum.
What is the initial amount that must be deposited to yield a total of P10,000 in
10 years?
A. P4,196.30
B. P4,721.39
C. P4,796.03
D. P4,631.93
541. If P500,000 is deposited at a rate of 11.25% compounded monthly,
determine the compounded interest after 7 years and 9 months.
A. P690,848.73
B. P670,651.23
C. P680,649.56
D. P685,781.25
542. An interest rate is quoted as being 7.5% compounded quarterly. What is
the effective annual interest rate?
A. 7.91%
B. 7.51%
C. 7.71%
D. 7.31%
543. You borrow P3,500.00 for one year from a friend at an interest rate of 1.5%
per month instead of taking a loan from a bank at a rate of 18% per year. How
much lesser you will pay by borrowing the money from the bank?
A. P53.89
B. P54.66
C. P53.78
D. P54.98
544. A deposit of P1,000 is made in a bank account that pays 8% interest
compounded annually. Approximately how much money will be in the account
after 10 years?
A. P2,187.39
B. P2,145.78
C. P2,176.45
D. P2,158.92
545. Fifteen years ago P1,000.00 was deposited in a bank account, and today it
is worth P2,370.00. The bank pays interest semi-annually. What was the
interest rate paid in this account?
A. 5.72%
B. 5.78%
C. 5.84%
D. 5.90%
546. P200,000 was deposited on January 1, 1988 at an interest rate of 24%
compounded semi-annually. How much would the sum be on January 1, 1993?
A. P631,627.78
B. P612,890.76
C. P621,169.64
D. P611,672.18
547. What is the present worth of two P100 payments at the end of the third
year and fourth year? The annual interest rate is 8%.
A. P150.56
B. P152.88
C. P153.89
D. P151.09
548. Consider a deposit of P600.00 to be paid back in one year by P700.00.
What is the rate of interest, i% per year compounded annually such that the net
present worth of the investment is positive? Assume i 0.
A. 16.50%
B. 16.75%
C. 16.33%
D. 16.67%
 549. A firm borrows P2,000 for 6 years at 8 %. At the end of 6 years, it renews
the loan for the amount due plus P2,000 more for 2 years at 8%. What is the
lump sum due?
A. P3,260.34
B. P3,280.34
C. P3,270.34
D. P3,250.34
550. A machine has been purchased and installed at a total cost of P18,000.00.
The machine will retire at the end of 5 years, at which time it is expected to
have a scrap value of P2,000.00 based on current prices. The machine will then
be replaced with an exact duplicate. The company plans to establish a reserve
funds to accumulate the capital needed to replace the machine. If an average
annual rate of inflation of 3% is anticipated, how much capital must be
accumulated?
A. P18,854.38
B. P18,548.38
C. P18,458.38
D. P18,845,38

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