ENGINEERING ECONOMY 8.

It is the practice of almost all banks in the Philippines that when they grant a loan, the
interest for one year is automatically deducted from the principal amount upon release of money to
1. Engr. Trinidad loans from a loan firm an amount of P100,000 with a rate of simple interest of a borrower. Let us therefore assume that you applied for a loan with a bank and the P80,000 was
20% but the interest was deducted from the loan at the time the money was borrowed. If at the end of one approved at an interest rate of 14% of which P11,200 was deducted and you were given a check of
year, she has to pay the full amount of P100,000, what is the actual rate of interest? P68,800. Since you have to pay the amount of P80,000 one year after, what then will be the
a. 23.5 % c. 25.0 % effective interest rate?
b. 24.7 % d. 25.8 % a. 16.02 % c. 16.32%
b. 16.28% d. 16.47%
2. 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. An investor wishes to earn 7% on his capital after payment of taxes. If the income
a. 5,937.50 c. 5, 712.40 from an available investment will be taxed at an average rate of 42%, what minimum rate of
b. 5,873.20 d. 5, 690.12 return, before payment of taxes, must the investment offer to be justified?
a. 12.07 %
3. Mr. Bacani borrowed money from the bank. He received from the bank P1,842 and promised to b. 12.34 %
repay P2,000 at the end of 10 months. Determine the rate of simple interest. c. 12.67 %
d. 12.87 %
a. 12.19 % c. 11.54 %
b. 12.03 % d. 10.29 % 10. Mr. Jun Ramos was granted a loan of P20,000 by his employer Excel First Review and
Training Center, Inc. with an interest of 6% for 180 days on the principal collected in advance.
4. A college freshman borrowed P2,000 from a bank for his tuition fee and promised to pay the The corporation would accept a promissory note for P20,000 non-interest for 180 days. If
amount for one year. He received only the amount of P1,920 after the bank collected the advance discounted at once, find the proceeds of the note.
interest of P80.00. What was the rate of discount? a. P18,000
b. P18,900
a. 3.67 % c. 4.15 % c. P19,000
b. 4.00 % d. 4.25 % d. P19,100

11. Miss Evilla borrowed money from a bank. She receives from the bank P1,340.00 and
5. A man invested P110,000 for 31 days. The net interest after deducting 20% withholding tax is promised to pay P1,500.00 at the end of 9 months. Determine the corresponding discount rate
P890.36. Find the rate of return annually. or often referred to as the banker’s discount.
a. 13.15 %
a. 11.50 % c. 11.95% b. 13.32 %
b. 11.75 % d. 11.32% c. 13.46 %
d. 13.73 %
6. The exact simple interest of P5,000 invested from June 21, 1995 to December 25, 1995 is P100.
What is the rate of interest? 12. 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. 3.90 % c. 3.95 % a. 9.01 %
b. 3.92 % d. 3.98% b. 9.14 %
c. 9.31 %
7. What is the ordinary interest on P1,500.50 for 182 days at 5.2%? d. 9.41 %
a. P39.01 c. P39.45 13. What is the effective rate corresponding to 18% compounded daily? Take 1 year is
b. P39.82 d. P39.99 equal to 360 days.
a. 19.61 %
b. 19.44 %
c. 19.31 %
d. 19.72 %
14. What rate of interest compounded annually is the same as the rate of interest of 8% 22. You borrow P3,500.00 for one year from a friend at an interest rate of 1.5% per month
compounded quarterly? instead of taking a loan from a bank at a rate of 18% per year. How much lesser you will pay by
a. 8.07 % borrowing the money from the bank?
b. 8.12 % a. P 62.44
c. 8.16 % b. P44.55
d. 8.24 % c. P54.66
15. Which of these gives the lowest effective rate of interest? d. P37.56
a. 12.35 % compounded annually 23. What is the present worth of two P 100 payments at the end of the third year and fourth
b. 11.90 % compounded annually year? The annual interest rate is 8%.
c. 12.20 % compounded annually a. P 150.56
d. 11.60 % compounded annually b. P 152.88
16. An amount of P1,000 becomes P1,608.44 after 4 years compounded bimonthly. Find the c. P 153.89
nominal interest. d. P 151.09
a. 11.89 % 24. A firm borrows P2,000 for 6 years at 8%. At the end of 6 years, it renews the
b. 12.00 % loan for the amount due plus P2,000 more for 2 years at 8%. What is the lump sum due?
c. 12.08 % a. P 3,260.34
d. 12.32 % b. P 3,280.34
17. How long will it take money to double itself if invested at 5% compounded annually? c. P 3,270.34
a. 13.7 years d. P 3,250.34
b. 14.7 years 25. In year zero, you invest P 10,000.00 in a 15% security for 5 years. During that time, the
c. 14.2 years average annual inflation is 6%. How much in terms of year zero pesos will be in the account at
maturity?
d. 15.3 years
a. P 15,030.03
18. 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 fund invested at 8% b. P 20,113.57
compounded quarterly? c. P 18,289.05
a. 11.23 years d. P 16,892.34
b. 11.46 years 26. The institute of Electronics and Communications Engineers of the Philippines (IECEP)
is planning to put up its own building. Two proposals being considered are:
c. 11.57 years
- The construction of the building now to cost P 400,000
d. 11.87 years - The construction of a smaller building now to cost P300,000 and at the end of 5
19. A sum of P1,000 is invested now and left for eight years, at which time the principal is years, an extension to be added to cost P 200,000.
withdrawn. The interest has accrued is left for another eight years. If the effective annual interest By how much is proposal B more economical than proposal A if interest rate is 20%
rate is 5%, what will be the withdrawal amount at the end of the 16th year? and depreciation to be neglected?
a. P693.12
b. P700.12 a. P 19,122.15 b. P 19,423.69 c. P 19,518.03 d. P 19,624.49
c. P702.15
d. P705.42 27. What is the present worth of a P500 annuity starting at the end of the third year
and continuing to the end of the fourth year, if the annual interest rate is 10 %?
20. Mandarin Bank advertises 9.5% account that yields 9.84% annually. Find how often the interest is
compounded. a. P 727.17 b. P 717.17 c. P 714.71 d. P 731.17

28. What annuity is required over 12 years to equate with a future amount of P 20,000?
a. Monthly b. Bimonthly c. Quarterly d. Annually Assume i= 6% annually.
21. A student plans to deposit P1,500 in the bank now and another P3,000 for the next 2 years. If he a. P 1,290.34 b. P 1,185.54 c.P 1,107.34 d. P 1,205.74
plans to withdraw P5,000 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 29. What is the present worth of a year annuity paying P 3,000.00 at the end of each
10%. year, with interest at 8% compounded annually?
a. P1,549.64 b. P1,459.64 c. P1,345.98 d. P1,945.64 a. P 7,654.04 b. P 7,731.29 c. P 7,420.89 d. P 7,590.12
30. A factory operator bought a diesel generator set for P 10,000.00 and agreed to pay the dealer 37. Mr. J. Dela Cruz borrowed money from the bank. He received from the bank
uniform sum at the end of each year for 5 years at 8% interest compounded annually, that the final P1,340.00and promised to pay P1,500.00 at the end of 9 months. Determine the simple
payment will cancel the debt for principal and interest. What is the annual payment?
interest rate and the corresponding discount rate
a. P 2,500.57 b. P 2,544.45 c. P 2,540.56 d. P 2,504.57
a. 15.92% ; 13.73%
31. A man loans P 187,400 from a bank with interest at 5% compounded annually. He agrees to pay b. 12.95% ; 17.33%
his obligations by paying 8 equal annual payments, the first being due at the end of 10 years. Find the c. 18.28% ; 13.12%
annual payments.
d. 19.25% ; 13.33%
a. P 43,600.10 b. P 43,489.47
c. P 43,263.91 d. P 43,763.20 38. A man borrowed from the bank under a promissory note that he signed in the amount of
P25000.00 for a period of 1year. He received only the amount of P21,915.00 after the bank collected
32. A person buys a piece of lot for P 100,000 downpayment and 10 deferred semi-annual payments the advance interest and an additional amount of P85.00 for notarial and inspection fees. What was
the rate of interest that the bank collected in advance?
of P 8,000 each, starting three years from now. What is the present value of the investment if the rate of
interest is 12% compounded semi-annually? a. 13.64% b. 16.43% c. 18.37% d. 10.32%
a. P 142,999.08 b. P 143,104.89 39. Karen was granted a loan of P20,000 by her employer CPM Industrial Fabricator
c. P 142,189.67 d. P 143,999.08 and Construction Corporation with an interest at 6% for 180days on the principal collected in
advance. The corporation would accept a promissory note for P20,000 non-interest for 180days. If
33. A young engineer borrowed P 10,000 at 12% interest and paid P 2,000 per annum for the last 4 discounted at once, find the proceeds in the note.
years. What does he have to pay at the end of the fifth year in order to pay off his loan?
a. P18,800 b. P18,000 c. P19,000 d. P18,400
a. P 6,999.39 b. P 6,292.93
c. P 6,222.39 d. P 6,922.93 40. P4000 is borrowed for 75days at 16% per annum simple interest. How much will be
due at the end of 75days?

a. P4186.43 b. P4133.33 c. P5124.54 d. P5625.43

34. Miss Calledo deposited P 1,000, P 1,500 and P 2,000 at the end of the 2 nd year, 3rd year and
th
4 year, respectively in a savings account which earned 10% per annum. How much is in the account 41. Mr. Bautista made a money market placement of P1,000,000 for 30 days at 7.5%
at the end of the 4th year? per year. If withholding tax is 20%, what is the net interest that Mr. Bautista will receive at the end of
the month?
a. P 4,880.00 b. P 4,820.00 c. P 4,860.00 d. P 4,840.00
a. P3,000 b. P6,000 c. P4,000 d. P5,000
35. A price tag of P1200 is specified if paid within 60 days but offers a 3% discount for
cash in 30 days. Find the rate of interest. 42. A bill for motorboat specifies the cost as P1,200 due at the end of 100 days but
offers a 4% discount for cash in 30days. What is the highest rate, simple interest at which the buyer
a. 37.11% b. 40.21% c. 38.51% d. 39.31% can afford to borrow money in order to take advantage of the discount?

36. It is the practice of almost all bank in the Philippines that when they grant a loan, the a. 18.4% b. 20.9% c. 19.6% d. 21.4%
interest for 1 year is automatically deducted from the principal amount upon release of money 43. In buying a computer disk, the buyer was offered the options of paying P250 cash
to a borrower. Let us therefore assume that you applied for a loan with the bank and the P80000 at the end of 30days or P270 at the end of 120days. At what rate is the buyer paying simple interest if
was approved at an interest rate of 14% of which P11200 was deducted and you were given a he agree to pay at the end of 120days?
check of P68800. Since you have to pay the amount of P80000 one year after, what then will be
a. 32% b. 28% c. 40% d. 25%
the effective interest rate?

a. 16.28% b. 17.30% c. 38.51% d. 39.31%

44. On March 1, 1996 Mr. Sarmiento obtains a loan of P1500 from Mr. Avila and signs a note 54. BY the condition of a will, the sum of P2000 is left to a girl to be held in trust fund by her
promising to pay the principal and accumulated simple interest at the rate of 5% at the end of guardian until it amount to P50000.00. When will the girl receive the money of the fund is
120days. On May 15, 1996, Mr. Avila discounts the note at the bank whose discount rate is 6%. What invested at 8% compounded quarterly?
does he receive?
a. 7.98 years b. 11.57 years c. 10.34 years d. 10.45 years
a. P2,201.48 b. P1,513.56 c. P1,123.29 d. P938.20
55. A man expects to receive P25,000 in 8 years. How much is that worth now considering
45. A deposit of P110,000 was made for 31days. The net interest after deducting 20% interest at 8% compounded quarterly?
withholding tax is P890.36. Find the rate of return annually.
a. P13,859.12 b. P13,675.23 c. P13,958.33 d. P13,265.83
a. 12.25% b. 12.75% c. 11.75% d. 11.95%
56. P500,000 was deposited at an interest of 6% compounded quarterly. Compute the compound
46. If you borrowed money from your friend with simple interest of 12%, find the present worth interest after 4 years and 9 months.
of P50,000 which is due at the end of 7months.
a. P163, 475.37 b. P158, 270.37 c. P178, 362.37 d. P183, 327.37
a. P46,200 b. P46,729 c. P44,893 d. P45,789
57. If the nominal interest rate is 3%, how much is P5000 worth in 10 years in a continuously
47. A man borrowed P2000 from a bank and promise to pay the amount for 1year. He received compounded account?
only the amount of P1,920 after the bank collected an advance interest of P80. What was the rate of
discount and the rate of interest that the bank collected in advance? a. P5750 b. P7500 c. P6750 d. P6350

a. 4% ; 4.17% b. 4% ; 4.71% 58. P200, 000 was deposited for a period of 4 years and 6 months and bears on interest of
c. 3% ; 3.17% d. 3% ; 3.71% P85, 649.25. What is the rate of interest if it is compounded quarterly?

a. 8% b. 7% c. 6% d. 5%
48. An engineer promised to pay P36,000 at the end of 90days. He was offered a 10% discount
if he pays in 30 days. Find the rate of interest. 59. How many years will P100,000 earn a compound interest of P50,000 if the interest rate is
9% compounded quarterly?
a. 64.6% b. 66.6% c. 65.6% d. 67.6%
a. 3.25 years b. 5.86 years c. 4.55 years d. 2.11 years
49. A man is required to pay P200 at the end of 160 days or P190 at the end of 40 days.
Determine the rate of interest. 60. A certain amount was deposited 5 years and 9 months ago at an interest of 8% compounded
quarterly. If the sum now is P315,379.85, how much was the amount deposited?
a. 18.4% b. 15.8% c. 19.6% d. 16.4%
a. P200,000 b. P240,000 c. P180,000 d. P260,000
50. Compute the discount if P2000 is discounted for 6 months at 8% simple interest.
For Problems 61-63. When compounded Bi-monthly, P15000 becomes P22,318.30 after 5years.
a. P29.67 b. P76.92 c. P67.29 d. P92.76
61. What is the nominal rate of interest?
51. The amount of P12800 in 4years at 5% compounded quarterly is _____.
a. 7% b. 9% c. 8% d. 10%
a. P14,785.34 b. P16,311.26 c. P15,614.59 d. P15,847.33
62. What is the equivalent rate if it is compounded quarterly?
52. A man borrows money from a bank which uses a simple discount rate of 14%. He signs a
promissory note promising to pay P500.00 per month at the end of 4th, 6th, and 7th month a. 7.03% b. 9.03% c. 8.03% d. 10.03%
respectively. Determine the amount of money that he received from the bank.
63. What is the effective rate if it is compounded quarterly?
a. P1403.68 b. P1102.37 c. P1340.38 d. P1030.28
a. 7.28% b. 9.28% c. 8.28% d.10.28%
53. A nominal interest of 3% compounded continuously is given on the account. What is the
accumulated amount of P10,000 after 10 years?

a. P13,610.10 b. P13,498.60 c. P13,500.10 d. P13,439.16

64. How will it take a money to double itself if invested at 5% compounded annually? 75. What is the difference of the amount 3 years from now for a 10% simple interest and 10%
compound interest per year? (P5000 accumulated)
a. 12.2 years b. 14.2 years c. 13.2 years d. 15.2years
a. P155 b. same c. P100 d. P50
65. Compute the effective annual interest rate which is equivalent to 5% nominal annual interest
compounded continuously. 76. Find the discount if P2,000 is discounted for 6 months at 8% compounded quarterly.

a. 5.13% b. 5.26% c. 4.94% d. 4.90% a. P76.92 b. P77.66 c. P80.00 d. P78.42

66. Find the time required for a sum of money to triple itself at 5% per annum compounded 77. If a sum of money triples in a certain period of time at a given rate interest, compute the
continuously. value of the single payment present worth factor.

a. 21.97 years b. 18.23 years c. 25.34 years d. 23.36 years a. 0.333 b. 0.292 c. 3.00 d. 1.962
67. A man wishes to have P40,000 in a certain fund at the end of 8 years. How much should he 78. If the single payment amount factor for a period of 5 years is 1.33822. What is the nearest
invest in a fund that will pay 6% compounded continuously? value of the interest rate?

a. P24,751.34 b. P28,864.36 c. P36,421.44 d. P30,468.42 a. 8% b. 5% c. 7% d. 6%

68. If the effective annual interest rate is 4%, compute the equivalent nominal annual interest 79. If the single payment present worth factor for a period of 8 years is equal to 0.58201,
compounded continuously. compute the nearest value of the rate of interest for that period.

a. 3.92% b. 3.80% c. 4.10% d. 4.09% a. 6% b. 5% c. 7% d. 8%

69. What is the nominal rate of interest compounded continuously for 10 years if the compound 80. If money is worth 8% compounded quarterly, compute the single payment amount factor for
amount factor is equal to 1.34986? a period of 6 years.

a. 3% b. 5% c. 4% d. 6% a. 1.60844 b. 1.70241 c. 0.62172 d. 0.53162

70. American Express Corp. charges 1.5% interest per month, compounded continuously on the 81. A sum of P1,000 is invested now and left for 8 years, at which time the principal is
unpaid balance purchases made on this credit card. Compute the effective rate of interest. withdrawn. The interest has an accrued left for another 8 years. If the effective annual interest is 5%,
what will be the withdrawn amount at the end of the 16th year?
a. 19.72% b. 21.20% c. 20.25% d. 19.90%
a. P507.42 b. P750.42 c. P705.42 d. P425.07
71. If the nominal interest is 12% compounded continuously, compute the effective annual rate
of interest. For problems 82 - 84: Compute the interest for an amount of P200,000 for a period of 8 years.

a. 12.75% b. 12.40% c. 11.26% d. 11.55% 82. If it was made at a simple interest rate of 16% .

72. Compute the difference in the future amount of P500 compounded annually at nominal rate a. P274,000 b. P256,000 c. P265,000 d. P247,000
of 5% and if it is compounded continuously for 5 years at the same rate.
83. If it was made at 16% compounded bi-monthly.
a. P3.87 b. P5.48 c. P4.21 d. P6.25
a. P507,267.28 b. P407,283.01 c. P507,365.96 d. P459,923.44
73. If the effective rate is 24%, what nominal rate of interest is charged for a continuously
compounded loan? 84. If it was made at 16% compounded continuously.

a. 21.51% b. 23.25% c. 22.35% d. 21.90% a. P422,462.64 b. P524,242.46 c. P507,233.24 d. P519,327.95

74. What is the nominal rate of interest compounded continuously for 8 years if the present
worth factor is equal to 0.6187835?

a. 4% b. 6% c. 5% d. 7%
85. Find the value of x, (F/P, x, 6) if F/P compounded quarterly is equal to 1.612226.

a. 7% b. 5% c. 8% d. 6%

86. Find the value of y, (P/F, 6%, y) if P/F compounded bi-monthly is equal to 0.787566.

a. 7 years b. 5 years c. 6 years d. 4 years

87. Find the rate of interest if compound amount factor compounded bi-monthly for 5 years is
equal to 1.487887.

a. 7% b. 5% c. 8% d. 6%

88. Compute the nominal rate for a period of 6 years for an effective rate of 8.33% if it is
compounded continuously.

a. 7% b. 5% c. 8% d. 6%

89. Compute the equivalent compound amount factor if it is compounded continuously.

a. 1.61607 b. 1.24532 c. 1.24282 d. 0.24245

90. Compute the equivalent present worth factor if it is compounded continuously.

a. 1.249347 b. 1.243248 c. 1.214359 d. 0.616783

91. A man loan P2000 from the bank. How long would it take in years for the amount of the
loan and interest to equal P3280 if it was made at 8% simple interest.

a. 7 years b. 5 years c. 8 years d. 6 years

92. A man loan P2000 from the bank. How long would it take in years if it was made at 8%
compounded quarterly.

a. 5.25 years b. 7.25 years c. 6.25 years d. 8.25 years

An amount of P1000 becomes P1608.44 after 4 years compounded bi-monthly. Find the nominal
rate of interest, the effective rate of interest, and the equivalent rate of interest if it is
compounded quarterly.

11% ; 12.623% ; 11.42%

12% ; 11.06% ; 12.724%
12% ; 12.616% ; 12.06%
11% ; 11.664% ; 11.93%

How long would it take your money to double itself if it is invested at 6% simple interest,
compounded semi-quarterly, and compounded continuously?

12.67 yrs ; 11.2 yrs ; 15.05 yrs

18.67 yrs ; 11.6 yrs ; 11.24 yrs
16.67 yrs ; 11.6 yrs ; 11.55 yrs
17.67 yrs ; 10.2 yrs ; 11.45 yrs

For problems 312 - 314:

An amount of P50,000 was invested for 3 years.

Compute its interest at the end of 3 years if it is invested at 10% simple interest.
P16,550.00
P15,000.00
P17,492.94
P14,242.15

Compute for its compound interest if it is invested at 10% compounded annually.

P16,550.00
P15,000.00
P17,492.94
P14,242.15

Compute its interest if it is invested at 10% compounded continuously.

P16,550.00
P15,000.00
P17,492.94
P14,242.15

For Problems 315 - 317:

P200,000 was deposited for a period of 4 yrs. And 6 months and bears on interest of P85,659.25.

What is the nominal rate of interest if it is compounded quarterly?

8.00%
7.00%
8.24%
7.96%

What is the actual rate of interest?

8.00% 8.24%
7.00% 7.96%
What is the equivalent nominal rate if it is compounded semi-quarterly?
8.00%
7.00%
8.24%
7.96%

What is the value of (F/P, 8%, 6) if it is compounded semi-quarterly.

0.524273541
1.487886717
0.787566127
1.612226000

What is the value of (P/F, 6%, 4) if it is compounded bi-monthly.

0.524273541
1.487886717
0.787566127
1.612226000

320.What is the single payment compound amount factor for 8% compounded bi-monthly for
5 years.

0.524273541
1.487886717
0.787566127
1.612226000

For Problems 321 - 323:

If money is invested at a nominal rate of interest of 8% for a period of 4 years.

What is the effective rate if it is compounded continuously?

8.33%
9.33%
8.93%
9.93%

What is the value of the compound amount factor if it is compounded continuously?

1.377128
1.424231
0.214212
0.122416

What is the value of the present worth factor if it is compounded continuously?

1. 272441
0.272441
1.726419
0.726149

If the single payment amount factor for a period of 5 years is 1.33822, what is the nominal
rate of interest?

6.00% 6.92%
7.00% 7.92%
 What is the effective rate of interest if it is compounded semi-annually of problem no.
324?

5.00%
7.24%
6.92%
6.09%

What is the equivalent nominal rate if it is compounded quarterly of problem no. 324?
6.12%
4.24%
5.43%
5.87%

Money was invested at x% compounded quarterly. If it takes money to quadruple in 17.5 years,
find the value of x.
6.23%
8.00%
5.92%
9.78%

What is the actual interest rate of problem no. 327?

7.24%
7.92%
8.24%
8.87%

What is the equivalent rate if problem no. 327 is compounded daily?

7.24%
7.92%
8.24%
8.87%

For Problems 330 - 332:

A businessman loaned P500,000 from a local bank that charges an interest rate of 12%.

How much is he going to pay at the end of 5 years if it was made at 12% simple interest?
P800,000.00
P911,059.20
P823,243.09
P907,009.21
How much is he going to pay at the end of 5 years if it was made at 12% compound semi-
quarterly?

P800,000.00
P911,059.20
P823,243.09
P907,009.21
How much is he going to pay at the end of 5 years if it was made at 12% compound continuously?

P800,000.00
P911,059.20
P823,243.09
P907,009.21
P60,000 was deposited at 6% compounded quarterly, tax free for 9 years and 3 months. How much
interest was earned at the end of the period?

P43,214.24
P44,086.60
P43.242.24
P44,215.60
P100,000 was placed in a time deposit which earned 9% compounded quarterly tax free. After how
many years would it be able to earn a total interest of P50,000?

4.56 years
3.45 years
4.23 years
3.64 years
P200,000 was placed in a time deposit at x% compounded quarterly and was free of taxes. After
exactly 5 years, the total interest earned was P120,000. What is the value of x?

9.5%
6.35%
8.21%
7.12%
Which of these gives the lowest effective rate of interest?
12.35% compounded annually
12.2% compounded quarterly
11.9% compounded semi-annually
11.6% compounded monthly
It takes 20.15 years to quadruple your money if it is invested at x% compounded semi-annually. Find
the value of x.

8%
7%
6%
5%
It takes 13.87 years to treble the money at the rate of x% compounded quarterly. Compute the
value of x.
5%
7%
6%
8%
Money was invested at x% compounded quarterly. If it takes the money into quadruple in 17.5 years,
find the value of x.

8%
7%
6%
5%
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 on this
account?

4.9%
5.0%
5.8%
3.8%
 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. Compare how much money you will save
or lose on the transaction.

pay P155 more if you borrowed from the bank

save P55 by borrowing from your friend
pay P85 more if you borrowed from the bank
save P95 by borrowing from your friend

Find the present worth of a future payment of P1000,000 to be made in 10 years with an interest
of 12% compounded quarterly.

P30,444.44
P30,655.68
P33,000.00
P30,546.01
An initial savings deposit of P80,000 in a certain bank earns 6% interest per annum compounded
monthly. If the earnings from the deposit are subject to a 20% tax, what would the net value of the
deposit be after three quarters?

P95,324.95
P68743.24
P82938.28
P56244.75
The effective rate of interest of 14% compounded semi-annually is:
14.49%
14.94%
14.36%
14.88%
The amount of P50,000 was deposited in a 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.

P71,781.47
P70,374.90
P72,475.23
P78,536.34
What is the effective rate corresponding to 18% compounded daily? Take 1 year is equal to 360 days.

18.35%
18.10%
19.39%
19.72%
If P1,000 becomes P1,126.49 after 4 years when invested at a certain nominal rate of interest
compounded semi-annually, determine the nominal rate and the corresponding effective rate.

3.00% and 3.02%

2.30% and 2.76%
4.29% and 4.32%
3.97% and 3.95%

Convert 12% semi-annually to compounded quarterly.

19.23%
14.67%
23.56%
11.83%
 What is the corresponding effective interest rate of 18% compounded semi-quarterly?
19.25%
18.46%
19.48%
18.95%

If P5000 shall accumulate for 10 years at 8% compounded quarterly, find the

compounded interest at the end of 10 years.

P6,005.30
P6,040.20
P6,000.00
P6,010.20

A couple borrowed P4,000 from a lending company for 6 years at 12%. At the end of 6 years, it
renews the loan for the amount due plus P4,000 more for 3 years at 12%. What is the lump
sum due?

P14,842.40
P12,316.40
P16,712.03
P15,382.60
How long (in years) will it take the money to quadruple if it earns 7% compounded semi-annually?

26.30 years
33.15 years
40.30 years
20.15 years
P200,000 was deposited on Jan. 1,1988 at an interest rate of 24% compounded semi-annually. How
much would the sum be on Jan. 1, 1993?

P421,170
P401,170
P521,170
P621,170
If P500,000 is deposited at a rate of 11.25% compounded monthly, determine the compounded
interest after 7 years and 9 months.

P690,849
P680,686
P670,258
P660,592
P200,000 was deposited at an interest rate of 24% compounded semi-annually. After how many
years will the sum be P621,170?

4 years
5 years
3 years
6 years

A bank is advertising 9.5% accounts that yields 9.84% annually. How often is the interest
compounded?

monthly
quarterly
bi-monthly
daily
A marketing company established a program to replace the cars of its sales representatives at the end of
every 5 years. If the present price of the approved type of car is P520,000.00 with a resale value at the
end of 5 years of 60% its present value, how much money must the company accumulate for 5 years if
inflation annually is 10%. Release value will also appreciate at 10% yearly.

P120,289.51
P110,297.27
P129,382.38
P122,265.69

In year zero, you invest P10,000.00 in a 15% security for 5 years. During that time, the average
annual inflation is 6%. How much, in terms of year zero will be in the account atmaturity?

P15,386.00
P13,382.00
P15,030.00
P16,653.00
A machine has been purchased and installed at a total cost of P18,000.00. The machine will be retired 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 fund 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?

P15,030.00
P12,382.00
P18,548.39
P15,386.00
If the inflation rate is 6%, cost of money is 10%, what interest rate will take care of inflation and
the cost of money?

16.6%
17.7%
15.5%
14.4%
A man bought a government bond which cost P1000 and will pay P50 interest each year for 20 years.
The bond will mature at the end of 20 years and he will receive the original P1000. If there is 2% annual
inflation during this period, what rate of return will the investor receive after considering the effect of
inflation?

2.94%
4.25%
3.16%
5.16%
The inflated present worth of P2000 in two years is equal to P1471.07. What is the rate of inflation if
the interest rate is equal to 10%?

6%
7%
5%
4%

12% rate of interest can take care of the cost of money and inflation. If the nominal rate of interest is
6%, what is the rate of inflation?

6.62%
7.67%
5.66%
4.64%
If P1000 accumulates to P1500 when invested at a simple interest for three years, what is the
rate of interest?

a. 14.12%
b. 15.89%
c. 16.67%
d. 16.97%

You loan from a loan firm an 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 one
year, you have to pay the full amount of P100,000, what is the actual rate of interest?

a. 23.5%
b. 24.7%
c. 25.0%
d. 25.8%
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?

e. P5,937.50
f. P5,873.20
g. P5,712.40
h. P5,690.12
If you borrowed money from your friend with simple interest at 12%, find the present worth of
P50,000, which is due at the end of 7 months.

i. P46,728.97
j. P47,098.12
k. P47,890.12
l. P48,090.21
Mr. J. Reyes borrowed money from the bank. He received from the bank P1,842 and promised to repay
P2,000 at the end of 10 months. Determine the rate of simple interest.

m. 12.19%
n. 12.03%
o. 11.54%
p. 10.29%
If you borrowed P10,000 from a bank with 18% interest per annum, what is the total amount to be
repaid at the end of one year?

q. P10,900
r. P11,200
s. P11,800
t. P12,000
A price tag of P1,200 is payable in 60 days but if paid within 30 days it will have a 3% discount. Find
the rate of interest.

u. 35.45%
v. 35.89%
w. 36.18%
x. 37.11%
A man borrowed P2,000 from a bank and promised to pay the amount for one year. He received only
the amount of P1,920 after the bank collected an advance interest of P80.00. What was the rate of
discount?

y. 3.67%
z. 4.00%
aa. 4.15%
bb. 4.25%
A man borrowed P2,000 from a bank and promised to pay the amount for one year. He received only
the amount of P1,920 after the bank collected an advance interest of P80.00. What was the rate of
interest that the bank collected in advance?

cc. 4.00%
dd. 4.07%
ee. 4.17%
ff. 4.25%

What will be the future worth of money after 12 months if the sum of P25,000 is
invested today at simple interest rate of 1% per year?

gg. P25,168
hh. P25,175
ii. P25,189
jj. P25,250
 What will be the future worth of money after 12 months if the sum of P25,000 is
invested today at simple interest rate of 1% per month?

a. P28,000
b. P28,165
c. P28,289
d. P28,250

480 It is the practice of almost all banks in the Philippines that when they grant a loan, the
interest for one year is automatically deducted from the principal amount upon release of
money to a borrower. Let us therefore assume that you applied for a loan with a bank and the
P80,000 was approved at an interest rate of 14% of which P11,200 was deducted and you
were given a check of P68,800. Since you have to pay the amount of P80,000 one year after,
what then will be the effective interest rate?

a. 16.02%
b. 16.28%
c. 16.32%
d. 16.47%

A deposit of P110,000 was made for 31 days. The net interest after deducting 20%
withholding tax is P890.36. Find the rate of return annually.

a. 11.50%
b. 11.75%
c. 11.95%
d. 12.32%

P5,000 is borrowed for 75 days at 16% per annum simple interest. How much will be due at
the end of 75 days?

a. P5,066.67
b. P5,133.33
c. P5,050.00
d. P5,166.67
A businessman wishes to earn 7% on his capital after payment of taxes. If the income from
an available investment will be taxed at an average rate of 42%, what minimum rate of
return, before payment of taxes, must the investment offer to be justified?

a. 12.07%
b. 12.34%
c. 12.67%
d. 12.87%
A man borrowed P20,000 from a local commercial bank which has a simple interest of 16% but
the interest is to be deducted from the loan at the time that the money was borrowed and the
loan is payable at the end of one year. How much is the actual rate of interest?

a. 19.05%
b. 19.34%
c. 19.67%
d. 19.87%
P4,000 is borrowed for 75 days at 16% per annum simple interest. How much will be due at the end
of 75 days?

e. P4,033.33
f. P4,333.33
g. P4,133.33
h. P4,666.67
 Agnes Abanilla was granted a loan of P20,000 by her employer CPM Industrial Fabricator and
Construction Corporation with an interest rate of 6% for 180 days on the principal collected in
advance. The corporation would accept a promissory note for P20,000 non-interest for 180
days. If discounted at once, find the proceeds of the note.

a. P18,800
b. P18,900
c. P19,000
d. P19,100

If you borrow money from your friend with simple interest of 12%, find the present worth
of P20,000 which is due at the end of nine months.

a. P18,992.08
b. P18,782.18
c. P18,348.62
d. P18,120.45
A man borrowed from a bank under a promissory note that he signed in the amount of P25,000.00 for a
period of one year. He receives only the amount of P21,915.00 after the bank collected the advance
interest and an additional of P85.00 for notarial and inspection fees. What was the rate of interest that
the bank collected in advance?

e. 13.05%
f. 13.22%
g. 13.46%
h. 13.64%
Mr. Danilo Conde borrowed money from a bank. He received from the bank P1,340.00 and promised to
pay P1,500.00 at the end of 9 months. Determine rate of simple interest.

i. 15.92%
j. 15.75%
k. 15.45%
l. 15.08%
Mr. J. Dela Cruz borrowed money from a bank. He receives from the bank P1,340.00 and
promised to pay P1,500.00 at the end of 9 months. Determine the corresponding discount rate o ofte
efe ed to as the a ke ’s dis ou t.
m. 13.15%

n. 13.32%
o. 13.46%
p. 13.73%
Annie buys a television set from a merchant who ask P1,250.00 at the end of 60 days. Annie wishes
to pay immediately and the merchant offers to compute the cash price on the assumption that
money is worth 8% simple interest. What is the cash price?

q. P1,124.67
r. P1,233.55
s. P1,289.08
t. P1,302.67

A man borrowed money from a loan shark. He receives from the loan shark and amount of
P1,342.00 and promised to repay P1,500.00 at the end of 3 quarters. What is the simple
interest rate?

a. 15.47%
b. 15.69%
c. 15.80%
d. 15.96%
Determine the exact simple interest on P5,000 invested for the period from January
15,1996 to October 12,1996, if the rate interest is 18%.

e. P664.23
f. P664.89
g. P665.21
h. P666.39

The exact simple interest of P5,000 invested from June 21,1995 to December 25,1995 is P100.
What is the rate of interest?

a. 3.90%
b. 3.92%
c. 3.95%
d. 3.98%

A man invested P110,000 for 31 days. The net interest after deducting 20% withholding tax is
P890.36. Find the rate of return annually.

a. 11.50 %

b. 11.75 %
c. 11.95 %
d. 12.32 %
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?

e. P8,807.92
f. P8,827.56
g. P8,832.17
h. P8,845.78
What is the ordinary interest on P1,500.50 for 182 days at 5.2%?
i. P39.01
j. P39.45
k. P39.82
l. P39.99
Nicole has P20,400 in cash. She invested it at 7% from March 1, 2006 to November 1, 2006 at 7%
interest. How much interest using the Banker’s Rule?
a. P972.12
b. P970.78
c. P973.12
d. P971.83
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?

m. P30,890.22
n. P30,980.22
o. P31,079.73
p. P31,179.37
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?

q. 9.01%
r. 9.14%
s. 9.31%
t. 9.41%
 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

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

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%
What nominal rate, compounded semi-annually, yields the same amount as 16% compounded
quarterly?

e. 16.09%
f. 16.32%
g. 16.45%
h. 16.78%
What rate of interest compounded annually is the same as the rate of interest of 8% compounded
quarterly?

i. 8.07%
j. 8.12%
k. 8.16%
l. 8.24%
Find the nominal rate, which if converted quarterly could be used instead of 12% compounded
semi-annually.

m. 11.83%
n. 11.09%
o. 11.65%
p. 11.25%
Which of these gives the lowest effective rate of interest?
q. 12.35% compounded annually
r. 11.90% compounded semi-annually
s. 12.20% compounded quarterly
t. 11.60% compounded monthly

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
 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%

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

What is the corresponding effective rate of 18% compounded semi-quarterly?

a. 19.24%
b. 19.48%
c. 19.84%
d. 19.92%

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

In how many years is required for P2,000 to increase by P3,000 if interest at 12% compounded
semi-annually?

e. 7.86 years
f. 7.65 years
g. 7.23 years
h. 8.12 years
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.

i. P215,344.40
j. P213,544.40
k. P234,153.40
l. P255.443.10
How long will it take money to double itself if invested at 5% compounded annually?
m. 13.7 years
n. 14.2 years
o. 14.7 years
p. 15.3 years
What is the corresponding effective interest rate of 18% compounded semi-monthly?
q. 19.35%
r. 19.84%
s. 19.48%
t. 19.64%
What is the effective rate of 14% compounded semi-annually?
u. 14.49%
v. 14.59%
w. 14.69%
x. 14.79%
At an interest rate of 10% compounded annually, how much will a deposit of P1,500 be in 15 years?

y. P6,265.87
z. P6,256.78
aa. P6,526.87
bb. P6,652.78
A man expects to receive P25,000 in 8 years. How much is that money worth now considering
interest at 8% compounded quarterly?
cc. P13,256.83
dd. P13,655.28
ee. P13,625.83
ff. P13,265.83
About how many years will P100,000 earn a compound interest of P50,000 if the interest rate is
9% compounded quarterly?

gg. 4 years
hh. 5 years
ii. 6 years
jj. 7 years

Compute the equivalent rate of 6% compounded semi-annually to a rate compounded quarterly.

kk. 5.12%
ll. 5.96%
mm. 5.78%
nn. 6.12%

What is the amount of P12,800 in 4 years at 5% compounded quarterly?

oo. P15,461.59
pp. P15,146.95
qq. P15,641.59
rr. P15,614.59

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?

ss. 11.23 years

tt. 11.46 years
uu. 11.57 years
vv. 11.87 years

If P50,000 shall accumulate for 10 years at 4% compounded quarterly, find the compounded
interest at the end of 10 years.

ww. P2,333.32
xx. P2,444.32
yy. P2,555.32
zz. P2,666.32
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
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%
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?

e. P4,626.12
f. P4,262.12
g. P4,383.12
h. P4,444.12
A man borrowed P100,000 at the interest rate of 12% per annum, compounded quarterly. What is the
effective rate?
i. 12.75%
j. 12.55%
k. 12.45%
l. 12.35%
Mandarin Bank advertises 9.5% account that yields 9.84% annually. Find how often the interest is
compounded.

m. Monthly
n. Bimonthly
o. Quarterly
p. Annually
When will an amount be tripled with an interest of 11.56%?
aaa. 9 years
bbb. 10 years
ccc. 11 years
ddd. 12 years

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

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
A nominal interest of 3% compounded continuously is given on the account. What is the accumulated
amount of P10,000 after 10 years?

e. P13,498.59
f. P13,489.59
g. P13,789.98
h. P13,494.52
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?

i. P6,176.35
j. P6,761.35
k. P6,716.53
l. P6,167.35
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?

m. P4,196.30
n. P4,721.39
o. P4,796.03
p. P4,631.93
If P500,000 is deposited at a rate of 11.25% compounded monthly, determine the compounded
interest after 7 years and 9 months.

q. P690,848.73
r. P670,651.23
s. P680,649.56
t. P685,781.25
An interest rate is quoted as being 7.5% compounded quarterly. What is the effective annual interest
rate?

u. 7.91%
v. 7.51%
w. 7.71%
x. 7.31%
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?

y. P53.89
z. P54.66
aa. P53.78
bb. P54.98
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?

cc. P2,187.39
dd. P2,145.78
ee. P2,176.45
ff. P2,158.92

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%
 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
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%.

e. P150.56
f. P152.88
g. P153.89
h. P151.09
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
positi e? Assu e i ≥ .
i. 16.50%
j. 16.75%
k. 16.33%
l. 16.67%
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?

m. P3,260.34
n. P3,280.34
o. P3,270.34
p. P3,250.34
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?

q. P18,854.38
r. P18,548.38
s. P18,458.38
t. P18,845,38
What is the effective rate corresponding to 16% compounding daily? Take 1 year = 360
days.

u. 17.35%
v. 17.45%
w. 17.55%
x. 17.65%

By the condition of a will, the sum of P25,000 is left to a girl to be held in a trust fund by her
guardian until it amounts to P45,000. When will the girl receive the money if the fund is
invested at 8% compounded quarterly?

a. 7.42 years
b. 7.67 years
c. 7.85 years
d. 7.98 years
 P200,000 was deposited at an interest rate of 24% compounded semi-annually. After how
many years will the sum be P621,170?

a. 4 years
b. 5 years
c. 6 years
d. 7 years
In year zero, you invest P10,000.00 in a 15% security for 5 years. During that time, the average annual
inflation is 6%. How much, in terms of year zero pesos will be in the account at maturity?

e. P15,030.03
f. P20,113.57
g. P18,289.05
h. P16,892.34
A company invests P10,000 today to be repaid in 5 years in one lump sum at 12% compounded
annually. How much profit in present day pesos is realized?

i. P7,563.29
j. P7,498.20
k. P7,340.12
l. P7,623.42
How long (in nearest years) will it take money to quadruple if it earns 7% compounded semi-annually?

m. 20 years
n. 18 years
o. 21 years
p. 19 years
How much should you put into a 10% savings account in order to have P10,000.00 in five
years?

q. P6,216.21
r. P6,212.12
s. P6,218.21
t. P6,209.21
A man expects to receive P20,000 in 10 years. How much is that money worth now considering
interest at 6% compounded quarterly?

u. P11,042.89
v. P11,035.12
w. P11,025.25
x. P11,012.52
P500,000 was deposited 20.15 years ago at an interest rate of 7% compounded semi-annually. How
much is the sum now?
y. P2,000,033.33
z. P2,000,166.28
aa. P2,001,450.23
bb. P2,002,820.12

A bank pays one percent interest on savings accounts four times a year. What is the
effective annual interest rate?

a. 4.06%
b. 4.12%
c. 4.16%
d. 4.28%
 Alexander Michael owes P25,000.00 due in 1 year and P75,000 due in 4 years. He agrees to pay
P50,000.00 today and the balance in 2 years. How much must he pay at the end of two years if
money is worth 5% compounded semi-annually?

a. P39,015.23
b. P39,026.25
c. P39,056.21
d. P39,089/78

Find the difference between simple interest and compound interest on a savings deposit of
P50,000 at 10% per annum for 3 years.

a. P1,510
b. P1,530
c. P1,550
d. P1,570

If money is worth 5% compounded quarterly, find the equated time for paying a loan of
P150,000 due in 1 year and P280,000 due in 2 years.

a. 1.52 years
b. 1.64 years
c. 1.69 years
d. 1.72 years

For a loan acquired six years ago, a man paid out the amount of P75,000.00. The interest was
computed at 18% compounded annually. How much was the borrowed amount?

a. P27,367.28
b. P27,278.36
c. P27,782.36
d. P27,872.63
A couple decided that for every child that will be born to them they will place a deposit in the bank so
that on the child’s 18th birthday, the child will receive the amount of P300,000.00. If the bank will pay an
interest of 18% compounded yearly, how much deposit will the couple have to make on the birth of a
child to them?

e. P15,367.18
f. P15,249.13
g. P15,722.16
h. P15,482.64
On his 6th birthday a boy is left an inheritance. The inheritance will be paid in a lump sum of the P10,
000.00 on his 21st birthday. What is the present value of the inheritance as of the boy’s 6th birthday, if
the interest is compounded annually? Assume i = 4%.
A. P5,552.64
B. P5,549.10
C. P5,522.12
D. P5,582.63
A man who won P300,000 in a lottery decided to place 50% of his winning in a trust fund for the college
education of his son. If the money will earn 14% per year compounded quarterly, how much will the
man have at the end of 10 years when his son will be starting his college education?

i. P593,120.12
j. P593,452.12
k. P592,739.96
l. P593,888.96
If the sum of P15,000 is deposited in an account earning 4% per annum compounded quarterly, what
will be the deposited amount at the end of 5 years?

m. P18,302.85
n. P18,450.89
o. P18,512.83
p. P18,638.29

The Philippine Society of Mechanical Engineers is planning to put up its own building. Two proposals
being considered are:
~The construction of the building now to cost P400,000.
~The construction of a smaller building now to cost P300,000 and at the end of 5
years, an extension to be added to cost P200,000.
By how much is proposal B more economical than proposal A if interest rate is 20% and
depreciation is to be neglected?

q. P19,122.15
r. P19,423.69
s. P19,518.03
t. P19,624.49

A credit plan charges interest rate of 36% compounded monthly. Find its effective rate.
a. 42.21%
b. 42.30%
c. 42.41%
d. 42.57%

A master card compounds monthly and charges an interest of 1.5% per month. What is the
effective interest rate per year?

a. 19.23%
b. 19.45%
c. 19.56%
d. 19.65%

A man expects to receive P20,000 in 10 years. If interest is computed at 6%

compounded quarterly, how much is it worth today?
a. P11,025.25
b. P11,035.25
c. P11,045.25
d. P11,055.25
Microsoft CEO, billionaire Bill Gates willed that a sum of $25 million be given to a child but will be held in
trust by the child’s mother until it amounts to $45 million. If the amount is invested and earns 8%
compounded quarterly, when will the child receive the money?
A. 8.11 years B. 7.90 years C. 7.42 yearS D. 7.24 years

Find the present value of installment payments of P1,000 now, P2,000 at the end of the first
year, P3,000 at the end of the second year, P4,000 at the end of the third year and P5,000 at
the end of the fourth year, if money is worth 10% compounded annually.

a. P11,411.10
b. P11,530.98
c. P11,621.67
d. P11,717.85
 How long will it take money to triple itself if invested at 8% compounded annually?
a. 14.27 years
b. 14.56 years
c. 14.78 years
d. 14.98 years

Two hundred years ago, your great, great, great grandfather deposited P1 in a savings
account. Today, the bank notified you that you are the sole heir to this account. How much is
the account today if it earns 8% per annum?

a. P4,002,450.78
b. P4,102,405.90
c. P4,838,949.58
d. P4,909,289.45

What is the present worth of a future payment of P200,000 to be made in 10 years with an
interest of 10% compounded annually?

a. P76,901.21
b. P77,108.66
c. P78,109.32
d. P79,667.32

A deposit of P1,000.00 is made in a bank account that pays 8% interest compounded

annually. How much money will be in the account after 10 years?

a. P2,374.21
b. P2,158.92
c. P2,734.12
d. P2,400.12
What nominal rate compounded annually would quadruple the principal in 4 years?
e. 41.42%
f. 40.81%
g. 41.79%
h. 40.45%
Five years ago, you paid P34,000 for a residential lot. Today you sell it at P50,000. What is your annual
rate of appreciation?
i. 8.12%
j. 8.00%
k. 7.92%
l. 8.32%
Suppose that P100,000 is invested at a certain rate of interest compounded annually for 2 years. If the
accumulated interest at the end of 2 years is P21,000. Find the rate of interest.

m. 10.12%
n. 10.00%
o. 10.92%
p. 10.32%

An investment of P20,000 will be required at the end of the year. The project would
terminate at the end of the 5th year and the assets are estimated to have a salvage value of
P25,000 at that time. What is the rate of interest for this project to break even?

a. 5.74%
b. 5.43%
c. 5.91%
d. 5.67%
 Robin Padilla possesses a promissory note, due in 2 years hence, whose maturity value is
P3,200. What is the discount value of this note, based on an interest rate of 7%?

a. P2,795.00
b. P2,975.00
c. P2,579.00
d. P2,759.00

JM borrowed a certain amount on June 1990 from DJ. Two years later, JM borrowed again from
DJ an amount of P5,000. JM paid P1,000 on June 1993 and discharged his balance by paying
P7,500 on June 1995. What was the amount borrowed by JM on June 1990 if the interest is 8%
compounded annually?

a. P1,511.61
b. P1,611.51
c. P1,711.41
d. P1,811.31
Dr. Gary Sy invests P50,000 in a time deposit that yields 10% for his retirement 30 years
from now. If the inflation rate is 5%, what will be the value of the account at maturity in terms of
today’s peso.

e. P201,689.91
f. P201,571.91
g. P201,345.91
h. P201,869.91
First Benchmark Publisher Inc. invests P100,000 today to be repaid in five years in one
lump sum at 12% compounded annually. If the rate of inflation is 4% compounded annually, how
much profit, in today’s pesos, is realized over 5-year period?

i. P44,512.89
j. P44,672.10
k. P44,851.64
l. P44,901.23

A manufacturing firm contemplates retiring an existing machine at the end of 2002. The new
machine to replace the existing one will have an estimated cost of P400,000. This expense will
be partially defrayed by the sale of the old machine as scrap for P30,000. To accumulate the
balance of the required capital, the firm will deposit the following sum in an account earning
interest at 5% compounded quarterly:

P60,000 at the end of 1999

P60,000 at the end of 2000

P80,000 at the end of 2001

What cash disbursement will be necessary at the end of 2002 to purchase the new machine?

P155,890.12
P153,085.56
P154,200.12
P156,930.38
On June 1, 1998, Ms. Brenda Marcial purchased stock of San Miguel Corporation at a total
cost of P144,000. She then received the following semiannual dividends:

P4,200 on December 1, 1998

P4,400 on June 1, 1999

P4,400 on December 1, 1999

P4,000 on June 1, 2000

After receiving the last dividend, Ms. Marcial sold her stock, receiving P152,000 after deduction of
brokerage fees. What semiannual rate did this dividend realize on her investment?

a. 4.26%
b. 4.54%
c. 4.87%
d. 4.91%

Engr. Narito has P13,760 in cash and he would like to invest it in business. His estimates of the
year-by-year receipts and disbursements for all purposes are shown in the tabulation below:

Year Receipts Disbursements

0 0 - P13,760

4 P5,000 + P1,000

5 P6,200 + P1,200

6 P7,500 + P1,500

7 P8,800 + P1,800

He estimates that his equipment will have a salvage value of P2,000 at the end of useful life.

Find the rate of return of the prospective equipment.

a. 10.11%
b. 11.80%
c. 11.10%
d. 10.51%

What interest rate, compounded monthly, is equivalent to a 10% effective rate?

a. 9.45%
b. 9.26%
c. 9.65%
d. 9.56%
 Froyd Wess Network Inc. plans to purchase a piece of land and to build a school building on this
land. However, since the school building is not an immediate requirement, the institute is
considering whether it should purchase this land and build the building now or defer this action
for 3 years. The current costs are as follows:

Land: P800,000 Building: P12,000,000

The purchase price of the land and the cost of the school building are expected to appreciate
at the rate of 15% and 4% per annum, respectively. What will be the total cost of the land and
structure 3 years hence?

a. P14,520,120
b. P14,715,068
c. P14,902,189
d. P15,021,781

Mr. Jimenez owes Mr. Padua the following amounts:

P40,000 due 2 years hence

P60,000 due 3 years hence

P72,000 due 4 years hence

Having won the lottery, Mr. Jimenez decided to liquidate the debts at the present time. If the two
parties agree on a 5% interest rate, what sum must Mr. Jimenez pay?

e. P147,520.20
f. P147,346.02
g. P147,902.89
h. P147,021.81

Mr. John Bongat working in the United States planned of returning to the Philippines at the end of 2001.
He established a fund starting in 1995 with the following recorded deposits and withdrawals.

January 1, 1995 Deposit of P40,000

January 1, 1997 Deposit of P80,000

July 1, 1997 Withdrawal of P12,000

July 1, 1998 Deposit of P64,000

January 1, 1999 Withdrawal of P48,000

His fund earned interest at the rate of 3.5% compounded semiannually until the end of 1997. At that
date, the interest was augmented to 4% compounded semiannually. What will be the principal in the
fund at the end of 2001?

P146,323.08
P146,992.99
P146,846.92
P146,022.82
JRT Publishers is contemplating of installing a labor-saving printing equipment. It has a choice
between two different models. Model A will cost P1,460,000 while model B will cost P1,452,000. The
anticipated repair costs for each model are as follows:
Model A: P60,000 at the end of 5th year
P80,000 at the end of 10th year

Model B: P152,000 at the end of 9th year

The two models are alike in all other respects. If the publisher is earning a 7% return of its capital,
which model should be purchased? How much savings will be accrued if the publisher will purchase
the more economical model?

a. P8,769.18
b. P8,918.23
c. P9,012.53
d. P9,341.11

What is the future amount of P50,000 if the single payment compound amount factor of this investment
is 1.23%

e. P61,700
f. P61,900
g. P61,200
h. P61,500

An investment indicates a single compound amount factor of 1.32 if

invested for n years. If the interest rate is 4.73% per annum, find the value
of n.

A. 4
B. 5
C. 6
D. 7
.
Mr. Mondragon invests P50,000 today. Several years later, it becomes P60,000. What is the single
payment present worth factor of this investment? If the amount was invested for 5 years, what is the
rate of interest?

i. 3.1%
j. 3.3%
k. 3.5%
l. 3.7%
Money is deposited in a certain account for which the interest is compounded continuously. If
the balance doubles in 6 years, what is the annual percentage rate?

m. 11.55%
n. 11.66%
o. 11.77%
p. 11.88%
On January 1, 1999, Ms. Angel Locsin opened an account at Bank of Philippine Islands with an initial
deposit of P1,000,000.00. On March 1, 2000, she opened an additional P1,000,000.00. If the bank
pays 12% interest compounded monthly, how much will be in the account on April 1, 2000?

q. P2,180,968.95
r. P2,190,968.95
s. P2,160,968.95
t. P2,170,968.95

What is the present worth of a P500 annuity starting at the end of the third year and continuing to
the end of the fourth year, if the annual interest rate is 10%?

A. P727.17
B. P717.17
C. P714.71
D. P731.17

610. 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
 617. 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

618. Find the annual payment to extinguish a debt of P10,000 payable for 6 years at 12%
interest annually.

A. P2,324.62
B. P2,234.26
C. P2,432.26
D. P2,342.26

619. A manufacturer desires to set aside a certain sum of money to provide funds to
cover the yearly operating expenses and the cost of replacing every year the dyes of a
stamping machine used in making radio chassis as model changes for a period of 10 years.

Operating cost per year = P500.00

Cost of dye = P1,200.00

Salvage value of dye = P600.00The money will be deposited in a savings account which earns 6%
interest. Determine the sum of money that must be provided, including the cost of the initial
dye.

A. P8,626.02
B. P8,662.02
C. P8,226.02
D. P8,666.22
A factory operator bought a diesel generator set for P10,000.00 and agreed to pay the dealer uniform
sum at the end of each year for 5 years at 8% interest compounded annually, that the final payment
will cancel the debt for principal and interest. What is the annual payment?

A. P2,500.57
B. P2,544.45
C. P2,540.56
D. P2,504.57
A man paid 10% downpayment of P200,000 for a house and lot and agreed to pay the 90% balance
on monthly installment for 60 months at an interest rate of 15% compounded monthly. Compute the
amount of the monthly payment.

E. P42,821.86
F. P42,128.67
G. P42,218.57
H. P42,812.68
What is the present worth of a 3 year annuity paying P3,000.00 at the end of each year, with interest at
8% compounded annually?

I. P7,654.04
J. P7,731.29
K. P7,420.89
L. P7,590.12
 623. What is the accumulated amount of five-year annuity paying P6,000 at the end of each
year, with interest at 15% compounded annually?

A. P40,519.21
B. P40,681.29
C. P40,454.29
D. P40,329.10

624. A debt of P10,000 with 10% interest compounded semi-annually is to be amortized

by semi-annual payment over the next 5 years. The first due in 6 months. Determine the
semi-annual payment.

A. P1,234.09
B. P1,255.90
C. P1,275.68
D. P1,295.05

625. A man borrowed P300,000 from a lending institution which will be paid after 10 years at
an interest rate of 12% compounded annually. If money is worth 8% per annum, how much
should he deposit to a bank monthly in order to discharge his debt 10 yrs. hence?

A. P5,174.23
B. P5,162.89
C. P5,190.12
D. P5,194.23

626. 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
C. P43,263.91
D. P43,763.20
Money borrowed today is to be paid in 6 equal payments at the end of 6 quarters. If the interest is 12%
compounded quarterly, how much was initially borrowed if quarterly payment is P2,000.00?

E. P10,834.38
F. P10,278.12
G. P10,450.00
H. P10,672.90
A person buys a piece of lot for P100,000 downpayment and 10 deferred semi-annual payments of
P8,000 each, starting three years from now. What is the present value of the investment if the rate of
interest is 12% compounded semi-annually?

I. P142,999.08
J. P143,104.89
K. P142,189.67
L. P143,999.08
How much must you invest today in order to withdraw P2,000 annually for 10 years if the interest
rate is 9%?

M. P12,835.32
N. P12,992.22
O. P12,562.09
P. P12,004.59
 630. How much must be deposited at 6% each year beginning on January 1, year 1, in
order to accumulate P5,000 on the date of the last deposit, January 1, year 6?

A. P728.99
B. P742.09
C. P716.81
D. P702.00

631. A piece of machinery can be bought for P10,000 cash or for P2,000 down and payments of
P750 per year for 15 years. What is the annual interest rate for the time payments?

A. 4.61%
B. 4.71%
C. 4.41%
D. 4.51%

632. A company issued 50 bonds of P1,000.00 face value each, redeemable at par at the
end of 15 years to accumulate the funds required for redemption. The firm established a
sinking fund consisting of annual deposits, the interest rate of the fund being 4%. What was
the principal in the fund at the end of the 12th year?

A. P38,120.00
B. P37,520.34
C. P37,250.34
D. P37,002.00

633. A house and lot can be acquired by a downpayment of P500,000 and a yearly payment
of P100,000 at the end of each year for a period of 10 years, starting at the end of 5 years from
the date of purchase. If money is worth 14% compounded annually, what is the cash price of the
property?

A. P806,899.33
B. P807,100.12
C. P807,778.12
D. P808,835.92

An instructor plans to retire in exactly one year and want an account that will pay him P25,000 a year
for the next 15 years. Assuming a 6% annual effective interest rate, what is the amount he would
need to deposit now? (The fund will be depleted after 15 years).

A. P242,860.22
B. P242,680.22
C. P242,608.22
D. P242,806.22

636. A manufacturing firm wishes to give each 80 employees a holiday bonus. How much is
needed to invest monthly for a year at 12% nominal interest rate compounded monthly, so that
each employee will receive a P2,000 bonus?

A. P12,615.80
B. P12,516.80
C. P12,611.80
D. P12,510.80
 637. A man purchased on monthly installment a P100,000 worth of land. The interest rate is
12% nominal and payable in 20 years. What is the monthly amortization?

A. P1,101.08
B. P1,202.08
C. P1,303.08
D. P1,404.08

638. A young engineer borrowed P10,000 at 12% interest and paid P2,000 per annum for the
last 4 years. What does he have to pay at the end of the fifth year in order to pay off his loan?

A. P6,999.39
B. P6,292.93
C. P6,222.39
D. P6,922.93

639. An investment of P350,000 is made today and is equivalent to payments of P200,000

each year for 3 years. What is the annual rate of return on investment for the project?

A. 32.7%
B. 33.8%
C. 33.2%
D. 33.6%

640. Maintenance cost of an equipment is P200,000 for 2 years, P40,000 at the end of 4
years and P80,000 at the end of 8 years. Compute the semi-annual amount that will be set aside
for this equipment. Money worth 10% compounded annually.

A. P7,425.72
B. P7,329.67
C. P7,245.89
D. P7,178.89
Mr. Cruz plans to deposit for the education of his 5 years old son, P500 at the end of each month for 10
years at 12% annual interest compounded monthly. The amount that will be available in two years is:

E. P13,100.60
F. P13,589.50
G. P13,982.80
H. P13,486.70
A small machine has an initial cost of P20,000, a salvage value of P2,000 and a life of 10 years. If your
cost of operation per year is P3,500 and your revenues per year is P9,000, what is the approximate
rate of return (ROR) on the investment?

I. 24.2%
J. 24.8%
K. 25.1%
L. 25.4%
An employee is about to receive the sum of P300.00 at the end of each year for 5 years. One year prior
to the receipt of the first sum, he decides to discount all 5 sum. If the interest rate is 6%, what proceeds
will he obtain?

M. P1,298.00
N. P1,231.09
O. P1,221.62
P. P1,263.71
 644. The president of a growing engineering firm wishes to give each of 50 employees
a holiday bonus. How much is needed to invest monthly for a year at 12% nominal rate
compounded monthly, so that each employee will receive a P1,000.00 bonus?

A. P3,942.44
B. P3,271.22
C. P3,600.12
D. P3,080.32

645. Mr. Padilla plans a deposit of P500 at the end of each month for 10 years at 12% annual
interest, compounded monthly. What will be the amount that will be available in 2 years?

A. P13,941.44
B. P13,272.22
C. P13,486.73
D. P13,089.32
Mr. Ramirez borrowed P15,000 two years ago. The terms of the loan are 10% interest for 10 years
with uniform payments. He just made his second annual payment. How much principal does he still
owe?

E. P13,841.34
F. P13,472.22
G. P13,286.63
H. P13,023.52
A man inherited a regular endowment of P100,000 every end of 3 months for 10 years. However, he
may choose to get a single lump sum payment at the end of 4 years. How much is this lump sum of the
cost of money is 14% compounded quarterly?

I. P3,702,939.73
J. P3,607,562.16
K. P3,799,801.23
L. P3,676,590.12
A man paid 10% down payment of P200,000 for a house and lot and agreed to pay the
balance on monthy installments for “x” years at an interest rate of 15% compounded monthly. If the
monthly installment was P42, 821.87, find the value of x.?

A. 3
B. 4
C. 5
D. 6
You need P4,000 per year for four years to go to college. Your father invested P5,000 in 7% account for
your education when you were born. If you withdraw P4,000 at the end of your 17th, 18th, 19th and
20th birthday, how much will be left in the account at the end of the 21st year?

A. P1,666.98
B. P1,699.86
C. P1,623.89
D. P1,645.67

650. Mr. Ayala borrows P100,000 at 10% effective annual interest. He must pay back the
loan over 30 years with uniform monthly payments due on the first day of each month. What
does Mr. Ayala pay each month?

A. P839.19
B. P842.38
C. P807.16
D. P814.75
 651. A machine is under consideration for investment. The cost of the machine is
P25,000.00. Each year it operates, the machine will generate a savings of P15,000.00. Given the
effective annual interest rate of 18%, what is the discounted payback period, in years, on the
investment of the machine?

A. 3.15
B. 1.75
C. 2.15
D. 2.75

A machine costs P20,000.00 today and has an estimated scrap value of P2,000.00 after 8 years. Inflation
is 2% per year. The effective annual interest rate earned on money invested is 8%. How much money
needs to be set aside each year to replace the machine with an identical model 8 years from now?

E. P3,345.77
F. P3,389.32
G. P3,489.11
H. P3,573.99
Engr. Santos 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. Santos pay
each month?

I. P838.86
J. P849.12
K. P850.12
L. P840.21
Instead of paying P100,000.00 in annual rent for office space at the beginning of each year for the next
10 years, an engineering firm has decided to take out a 10-year P1,000,000.00

loan for a new building at 6% interest. The firm will invest P100,000.00 of the rent saved and
earn 18% annual interest on that amount. What will be the difference between the firm’s annual

revenue and expenses?

A. P10,200.12
B. P10,205.13
C. P10,210.67
D. P10,215.56
A service car whose cash price was P540,000 was bought with a downpayment of P162,000 and
monthly installment of P10,874.29 for 5 years. What was the rate of interest if compounded
5monthly?

A. 20%
B. 24%
C. 21%
D. 23%
What uniform annual amount should be deposited each year in order to accumulate P100,000.00 at
the end of the 5th annual deposit if money earns 10% interest?

E. P16,002.18
F. P15,890.12
G. P16,379.75
H. P15,980.12
 657. In five years, P18,000 will be needed to pay for a building renovation. In order to
generate this sum, a sinking fund consisting of three annual payments is established now. For
tax purposes, no further payment will be made after three years. What payments are
necessary if money worth 15% per annum?

A. P3,919.52
B. P3,871.23
C. P3,781.32
D. P3,199.52

658. Find the present value in pesos, of a perpetuity of P15,000 payable semi-annually if
money is worth 8% compounded quarterly.

A. P371,719.52
B. P371,287.13
C. P371,670.34
D. P371,802.63

659. If P500.00 is invested at the end of each year for 6 years, at an annual interest rate of
7%, what is the total peso amount available upon the deposit of the sixth payment?

A. P3,671.71
B. P3,712.87
C. P3,450.12
D. P3,576.64

660. How many years must you invest today in order to withdraw P1,000.00 per year for
10 years if the interest rate is 12%?
A. P5,467.12
B. P5,560.22
C. P5,650.22
D. P5,780.12

661. A man paid a 10% down payment of P200,000 for a house and lot and agreed to pay
the balance on monthly installments for 5 years at an interest rate of 15% compounded
monthly. What was the monthly installment in pesos?

A. P42,821.87
B. P42,980.00
C. P43,102.23
D. P43,189.03
A man inherited a regular endowment of P100,000.00 every end of 3 months for x years. However, he
may choose to get a single lump sum of P3,702,939.80 at the end of 4 years. If the rate of interest was
14% compounded quarterly, what is the value of x?

E. 10
F. 11
G. 12
H. 13
If you obtain a loan of P1M at the rate of 12% compounded annually in order to build a house, how
much must you pay monthly to amortize the loan within a period of 10 years?

I. P13,994.17
J. P14,801.12
K. P13,720.15
L. P14,078.78
Rej Averion borrowed P50,000.00 from Social Security System, in the form of calamity loan, with
interest at 8% compounded quarterly payable in equal quarterly installments for 10 years. Find the
quarterly payments.

A. P1,590.83
B. P1.609.23
C. P1,778.17
D. P1,827.79
For having been loyal, trustworthy and efficient, the company has offered a supervisor a yearly gratuity
pay of P20,000.00 for 10 years with the first payment to be made one year after his retirement. The
supervisor, instead, requested that he be paid a lump sum on the date of his retirement less interact
that the company would have earned if the gratuity is to be paid on the yearly basis. If interest is 15%,
what is the equivalently lump sum that he could get?

E. P100,357.37
F. P100,537.73
G. P100,375.37
H. P100,735.37
In anticipation of a much bigger volume of business after 10 years, a fabrication company purchased
an adjacent lot for its expansion program where it hopes to put up a building projected to cost
P4,000,000.00 when it will be constructed 10 years after, To provide the required capital expense, it
plans to put up a sinking fund for the purpose. How much must the company deposit each year if
interest to be earned is computed at 15%?

I. P194,089.17
J. P195,780.12
K. P196,801.56
L. P197,008.25
A man purchased a car with a cash price of P350,000. He was able to negotiate with the seller to allow
him to pay only a downpayment of 20% and the balance payable in equal 48 end of the month
installment at 1.5% interest per month. Once the day he paid the 20th installment, he decided to pay
monthly payment. How much is his monthly payment?

M. P8,929.29
N. P8,225.00
O. P8,552.00
P. P8,008.20
A man purchased a car with a cash price of P350,000. He was able to negotiate with the seller to allow
him to pay only a downpayment of 20% and the balance payable in equal 48 end of the month
installment at 1.5% interest per month. Once the day he paid the 20th installment, he decided to pay
monthly payment. What is the remaining balance that he paid?

Q. P186,927.24
R. P188,225.00
S. P187,701.26
T. P185,900.20
A company purchased for a cash price of P500,000.00 a machine which is estimated to have a salvage
value of P50,000.00 at the end of its 10 years economic life. How much yearly deposit must the
company deposit in a sinking fund that will pay 18% interest, compounded yearly, to accumulate the
needed fund to purchase the new machine at the end of the 10th year economic life of the machine it
purchased if a new machine will cost 75% more by that time?

U. P34,859.78
V. P35,890.12
W. P35,074.58
X. P34,074.85
670. A car dealer advertises the sale of a car model for a cash price of P280,000. If purchased
on installment, the regular downpayment is 15% and balance payable in 18 equal monthly
installments at an interest rate of 1.5% per month. How much will be required monthly
payments?

A. P15,185.78
B. P15,289.12
C. P15,783.90
D. P15,632.11

671. A machinery supplier is offering a certain machinery on a 10% downpayment and the
balance payable in equal end of the year payments without interest for 2 years. Under this
arrangement, the price is pegged to be P250,000. However, for cash purchase, the machine
would only cost P195,000. What is the equivalent interest rate that is being charged on the 2-
year payment plan if interest is compounded quarterly?

A. 18.47%
B. 19.21%
C. 19.47%
D. 19.74%

672. A company has approved a car plan for its six senior officers in which the company will
shoulder 25% of the cost and the difference payable by each officer to a financing company in

48 equal end of the month installments at an interest rate of 1.5% per month. If the cost of
each car is P350,000, determine the amount each officer has to pay the financing company per
month?

A. P7,523.90
B. P7,619.22
C. P7,190.00
D. P7,710.94

673. If P10,000 is deposited each year for 9 years, how much annuity can a person get
annually from the bank every year for 8 years starting 1 year after the 9th deposit is made. Cost
of money is 14%.

A. P34,467.21
B. P34,567.81
C. P34,675.18
D. P34,867.37

674. An employee is earning P12,000.00 a month and he can afford to purchase a car which
will require a downpayment of P10,000.00 and a monthly amortization of not more than 30% of
his monthly salary. What should be the maximum cash value of a car he can purchase if the
seller will agree to a downpayment of P10,000.00 and the balance payable in four years at 18%
per year payable on monthly basis? The first payment will be due at the end of the first month?

A. P135,267.21
B. P135,507.42
C. P135,605.48
D. P135,807.30
A new company developed a program in which the employees will be allowed to purchase shares of
stocks of the company at the end of its fifth year of operation, when the company’s thought to have
gained stability already. The stock has a par value of P100.00 per share.
Believing in the good potential of the company, an employee decided to save in a bank the amount of
P8,000.00 at the end of every year which will earn for him 9% interest, compounded annually.
How much shares of stocks will he be able to purchase at the end of the fifth year of his yearly
deposits?

A. 476
B. 478
C. 480
D. 482
Mr. Juan dela Cruz borrows P100,000 at 10% compounded annually, agreeing to repay the loan in
twenty equal annual payments. How much of the original principal is still unpaid after he has made
the tenth payment?

A. P69,890.42
B. P72,000.80
C. P72,173.90
D. P72,311.44
A debt of P12,000 with an interest of 20% compounded quarterly is to be amortized by equal semi-
annual payments over the next three years, the first due in 6 months. How much is the semi-annual
payments?

E. P2,775.50
F. P2,662.89
G. P2,590.04
H. P2,409.78
A fund donated by a benefactor to PICE to provide annual scholarships to deserving CE students. The
fund will grant P5,000 for each of the first five years, P8,000 for the next five years and P10,000 each
year thereafter. The scholarship will start one year after the fund is established. If the fund earns 8%
interest, what is the amount of the donation?

I. P99,490.00
J. P99,507.35
K. P99,601.71
L. P99,723.54
If a low cost house and lot worth P87,000 were offered at 10% downpayment and P500 per month for
25 years, what is the effective monthly interest rate on the diminishing balance?

M. 0.492%
N. 4.92%
O. 0.0492%
P. 49.2%

677. The average annual cost of damages caused by floods at Dona Rosario Village located
along Butuanon river is estimated at P700,000. To build a gravity dam to protect the area
from the floods, would cost P2,500,000 and would involve an annual maintenance cost of
P20,000. With interest at 8% compounded annually, how many years will it take for the dam
to pay for itself?

A. 4.0 years
B. 4.5 years
C. 5.0 years
D. 5.5 years
681. A businessman borrowed P10,000.00 from a bank at 12% interest, and paid P2,000.00
per annum for the first 4 years. What does he pay at the end of the fifth year in order to pay-off
the loan?

A. P6,812.54
B. P6,782.31
C. P6,917.72
D. P6,660.90

682. Engr. Rodel Narito agreed to pay the loan he is borrowing from a development bank
in six annual end-of-the-year payments of P71,477.70. Interest is 18% per annum
compounded annually and is included in the yearly amount he will be paying the bank. How
much money Engr. Narito is borrowing from the bank?

A. P250,000
B. P260,000
C. P270,000
D. P280,000

683. Rona wishes to purchase a 29-inch flat-screened colored TV at Bodega Appliance Center
an amount of P20,000.00. She made a downpayment of P5,000.00 and the balance payable in
24 equal monthly installments. If financing charge is 12% for each year computed on the total
balance to be paid by installment and interest rate 12%, how much would Rona pay every
month for the colored TV? What will be the actual cost of the money?

A. 36.71%
B. 36.21%
C. 35.89%
D. 35.23%

684. Engr. Bacolongan of Main Engineering decided to purchase a machine which is to be

used for their refrigeration and airconditioning works at an amount of P1,200,000. The useful
life of the machine is estimated to be 5 years with a salvage value of P80,000 as based on
current prices. The average annual rate of inflation during the next 5 years will be 7%. The
machine will be replaced with a duplicate and the firm will accumulate the necessary capital by
making equal end-of-year deposits in a reserve fund that earns 6% per annum. Determine the
annual deposit.

A. P277,189.56
B. P278,664.54
C. P279,180.00
D. P280,673.12

697. A housewife bought a brand new washing machine costing P12,000 if paid in cash.
However, she can purchase it on installment basis to be paid within 5 years. If money is worth
8% compounded annually, what is her yearly amortization if all payments are to be made at the
beginning of each year?

A. P2,617.65
B. P2,782.93
C. P2,890.13
D. P2,589.90
A Civil Engineering student borrowed P2,000.00 to meet college expenses during his senior year. He
promised to repay the loan with interest at 4.5% in 10 equal semi-annual installments, the first payment
to be made 3 years after the date of the loan. How much will this payment be?

A. P252.12
B. P261.89
C. P273.90
D. P280.94
A father Wishes to provide P40000, for his son on his son’s 21st birthday. How much should he
deposit every 6 months in a savings account which pays 3% compounded semiannually, if the first
deposit was made when the son was 3 ½ years old?

A. P829.68
B. P815.80
C. P830.12
D. P846.10
A house costs P400,000 cash. A purchaser will pay P90,000 cash, P60,000 at the end of 2 years and a
sequence of 6 equal annual payments starting with one at the end of 4 years, to discharge all his
liabilities as to the principal and interest at 7% compounded annually. Find the annual payment which
must be made for 6 years.

A. P66,204.14
B. P65,701.67
C. P67,901.34
D. P68,900.12
Two years ago, the rental for the use of equipment and facilities as paid 5 years in advance, with option
to renew the rent for another years by payment of P15,000 annually at the start of each year for the
renewal period. Now, the lessor asks the lessee if it could be possible to prepay the rental that will be
paid annually in the renewed 5 years period. If the lessee will consider the request, what would be the
fair prepayment to be made to the lessor if interest is now figured at 8 %?
E. P51,843.90
F. P51,346.58
G. P52,002.45
H. P52,740.20
728. 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

729. Miss Marcial deposited P1,000, P1,500 and P2,000 at the end of the 2nd year, 3rd year
and 4th year, respectively in a savings account which earned 10% per annum. How much is in
the account at the end of the 4th year?

A. P4,880.00
B. P4,820.00
C. P4,860.00
D. P4,840.00
 736. Miss Santos deposited P1,000, P1,500 and P2,000 at the end of the 2nd year, 3rd
year and 4th year, respectively in a savings account which earned 10% per annum. What is
the equivalent uniform deposit for the uniform gradient only?

A. P670.81
B. P690.58
C. P660.53
D. P680.12

737. An amortization of a debt is in a form of a gradient series of P5,000 on the first years,
P4,500 on the second year, P4,000 on the third year and P3,500 on the fourth year. What is the
equivalent present worth of the debt if interest is 5%?

A. P15,093.28
B. P15,178.34
C. P15,890.12
D. P15,389.82

738. An amortization of a debt is in a form of a gradient series of P5,000 on the first year,
P4,500 on the second year, P4,000 on the third year, P3,500 on the fourth year. Determine
future amount of the amortization if interest is 5%.

A. P18,030.56
B. P18,290.12
C. P18,621.89
D. P18,449.37

739. An amortization of a debt is in a form of a gradient series of P5,000 on the first year,
P4,500 on the second year, P4,000 on the third year, P3,500 on the fourth year. What is the
equivalent uniform periodic payment if interest is 5%?

A. P4,280.47
B. P4,378.17
C. P4,259.68
D. P4,325.12

740. An NBA Basketball superstar, playing for Los Angeles Lakers is earning an average annual
salary of $5,000,000 for 10 years. Chicago Bulls ball club would like to acquire his services as a
replacement of the retired Michael Jordan, offered him an initial annual salary of $3,000,000 but
is increasing at the rate of $400,000 annually. If he can still play in the NBA for 10 years and

money is worth 10%, which one is true?

A. Chicago Bull’s offer is smaller than that of LA Lakers

B. Chicago Bulls’ offer is exactly the same as LA Lakers’

C. Chicago Bulls’ offer is just few dollars more per year than that of LA Laker’s

D. Chicago Bulls’ offer is over S150,000 per year than that of LA Lakers’
Two sisters, Joan and Jocelyn decided to save money in funds that earns 14% compounded annually but
on different ways. Joan decided to save by making an end-of-year deposit of P1,000 on the first year,
P1,100 on the second year, P1,210 on the third year and so on increasing the next year’s deposit by
10% of the deposit in the preceding year until the end of the 10th year. Jocelyn decided to save by
just making an equal deposit of P1,400 annually for 10 years. Who has more savings at the end of 10
years and by how much bigger compared to the other sister?
A. Jocelyn, P671.18

B. Jocelyn, P763.27

C. Joan, P671.18

D. Joan, P763.27

Engr. Maragat, 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
C. P17,672.77
D. P17,490.21
A newly-acquired equipment requires an annual maintenance costs of P10,000. If the annual
maintenance cost is increased by 20% each year every year for 10 years, what is the estimated
present worth of the maintenance costs if money is worth 15%?

E. P105,712.33
F. P106,101.37
G. P107,490.12
H. P108,890.11

918. Find the interest on P6,800.00 for 3 years at 11% simple interest.
A. P 1,875.00
B. P 1,987.00
C. P 2,144.00
D. P 2,244.00

919. A man borrowed P10,000.00 from his friend and agrees to pay at the end of 90 days
under 8% simple interest rate. What is the required amount?
 A. P 10,200.00
B. P 11,500.00
C. P 9,500.00
D. P 10,700.00

920. Annie buys a television set from a merchant who offers P25,000.00 at the end of
60days. Annie wished to pay immediately and the merchant offers to compute the required
amount on the assumption that the money is worth 14% simple interest. What is the
required amount?

A. P 20,234.87
B. P 19,222.67
C. P 24,429.97
D. P 28,456.23
924. What is the principal amount if the amount of interest at the end of 2 1/2 year is
P4,500.00 for a simple interest of 6% per annum?

A. P 35,000.00
B. P 30,000.00
C. P 40,000.00
D. P 45,000.00

925. How long must a P40,000 note bearing 4% simple interest run to amount to P41,350.00?
A. 340days
B. 403 days
C. 304 days
D. 430 days

926. If P16,000 earns P480 in 9monnths, what is the annual rate of interest?
A. 1%
B. 2%
C. 3%
D. 4%

927. A man lends P6,000 at 6% simple interest for 4 years. At the end of this time he invest
the entire amount (principal plus interest)at 5% compounded annually for 12 years. How much
will he have at the end of the 16-year period.?

A. P 13,361.20
B. P 13,633.20
C. P13,333.20
D. P16,323.20

928. A time deposit of P110,000 for 31days earns P890.39 on maturity date after
deducting the 20% withholding tax on interest income. Find interest per annum.

A. 12.5%
B. 11.95%
C. 12.25%
D. 11.75%

929. A bank charges 12% simple interest on a P300.00 loan. How much will be repaid if the
loan is paid back in one lump sum after three years.
A. P 408.00
B. P 551.00
C. P415.00
D. P450.00

930. A tag price of a certain commodity is for 100 days. If paid in 31 days, there
is 3%discount. What is the simple interest paid?

A. 12.5%
B. 6.25%
C. 22.32%
D. 16.14%

931. Accumulate P5,000.00 for 10 years at 8% compounded quarterly.

A. P 12,456.20
B. P 13,876.50
C. P10,345.80
D. P11,040.20
932. Accumulate P5,000.00 for 10 years at 8% compounded semi-annually.
A. P 10,955.61
B. P 10,233.67
C. P9,455.67
D. P11,876.34

933. Accumulate P5,000.00 for 10 years at 8% compounded monthly

A. P 15,456.75
B. P 11,102.61
C. P10,955.61
D. P10,955.61

934. Accumulate P5,000.00 for 10 years at 8% compounded annually.

A. P 10,794.62
B. P 8,567.97
C. P10,987.90
D. P7,876.87

935. How long it will take P1,000 to amount to P1,346 if invested at 6% compounded
quarterly.

A. 3 years
B. 4 years
C. 5 years
D. 6 years

936. How long will it take for an investment to double its amount if invested at an
interest rate of 6% compounded bi-monthly

A. 10 years
B. 12 years
C. 13 years
D. 14 years

937. If the compound interest on P3,000.00 in years is P500.00 then the compound
interest on P3,000.00 in 4 years is:

A. P 956.00
B. P 1,083.00
C. P1,125.00
D. P1,526.00

938. The salary of Mr. Cruz is increased by 30%every 2 years beginning January 1, 1982.
Counting from that date, at what year will his salary just exceed twice his original salary?

A. 1988
B. 1989
C. 1990
D. 1991

939. If you borrowed P10,000 from the bank with 18% interest per annum, what is the
total amount to be repaid at the end of one year.

A. P 11,800.00
B. P 19,000.00
C. P28,000.00
 D. P10,180.00

940. What is the effective rate for an interest rate at 12% compounded continuously?
A. 12.01%
B. 12.89%
C. 12.42%
D. 12.75%
How long it will take for an investment to fivefold its amount if money is worth
14%compounded semiannually.

A. 11
B. 12
C. 13
D. 14
An interest of 8% compounded semiannually is how many percent if compounded quarterly?

E. 7.81%
F. 7.85%
G. 7.92%
H. 8.01%
A man is expecting to receive P450,000.00 at the end of 7 years. If money is worth 14% compounded
quarterly how much is it worth at present?

I. P 125,458.36
J. P 147,456.36
K. P162,455.63
L. P171,744.44
A man has a will of P650,000.00 from his father. If his father deposited an amount of P450,000 in a
trust fund earning 8% compounded annually, after how many years will he man receive his will?

M. 4.55 years
N. 4.77 years
O. 5.11 years
P. 5.33 years
Mr. Adam deposited P120,000.00 in a bank who offers 8%interest compounded quarterly. If the
interest is subject to a 14% tax, how much will he receive after 5 years?

Q. P 178,313.69
R. P 153,349.77
S. P 170,149.77
T. P 175,343.77
What interest compounded monthly is equivalent to an interest rate of 14% compounded
quarterly

U. 1.15%
V. 13.84%
W. 10.03%
X. 11.52%
What is the worth of two P100,000 payments at the end of the third and the fourth year? The
annual interest rate is 8%.

Y. P 152.87
Z. P 112.34
AA. P 187.98
BB. P 176.67

942. A firm borrows P2,000.00 for 6years 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. P 5,679.67
B. P 6,789.98
C. P 6,034.66
D. P 5,888.77
949. At an annual rate of return of 8%, what is the future worth ofP1,000 at the end of 4
years?

A. P 1,388.90
B. P 1,234.56
C. P 1,765.56
D. P 1,360.50

950. A student has money given by his grandfather in the amount of P20,000.00. How
much money in the form of interest will he get if the money is put in a bank that offers 8% rate
compounded annually at the end of 7 years?

A. P 34,276.48
B. P 34,270.00
C. P 36,276.40
D. P 34,266.68