Engineering Economy

1. It is the amount which a willing buyer will pay to willing seller for a property
where each has equal advantage and is not compelled to buy or sell.
a. Market Value
b. Fair Value
c. Use Value
d. Book Value
2. It is defined to be the capacity of a commodity to satisfy human want.
a. Luxuries
b. Utility
c. Discount
d. Necessity
3. What is the effective rate corresponding to 16% compounded daily? Take 1
year=360 days
a. 16.78%
b. 16.5%
c. 17.35%
d. 17.84%
4. What rate of interest compounded annually is the same as the rate of interest
of 8% compounded quarterly?
a. 8.24%
b. 8.42%
c. 6.88%
d. 7.9%
5. How long will it take the money to triple itself if invested at 10% compounded
semi-annually?
a. 13.3 years
b. 11.3 years
c. 11.9 years
d. 12.5 years
6. A man wishes his son to receive P500,000.00 ten years from now. What
amount should he invest now if it will earn interest of 12% compounded
annually during the first 5 years and 15% compounded quarterly during the
next 5 years?
a. Php 135,868.19
b. Php 134,678.90
c. Php 123,433.23
d. Php 145,345.34
7. By the condition of a will, the sum of Php 20,000.00 is left to a girl to be held
in trust fund by her guardian until it amounts to Php 50,000.00. When will the
girl receive the money if the fund is invested at 8% compounded quarterly?
a. 7.89 years
b. 10.34 years
c. 11.57 years
d. 10.45 years
8. The amount of Php 12,800.00 in 4 years at 5% compounded quarterly is
________.
a. Php 14,785.34
b. Php 15,614.59
 c. Php 16,311.26
d. Php 15, 847.33
9. How much money must you invest today in order to withdraw Php 2,00.00
annually for 10 years if the interest rate is 9%?
a. Php 12,853.32
b. Php 12,881.37
c. Php 12,385.32
d. Php 12,835.32
10. Money borrowed today is to be paid in 6 equal payments at the end of 6
quraters. If the interest is 12% compounded quarterly, how much was initially
borrowed if quarterly payments is Php 2,000.00?
a. Php 10, 834.38
b. Php 10,382.90
c. Php 10,586.99
d. Php 10,200.56
11. It is a series of equal payments occurring at equal intervals of time where the
first payment is made after several periods after the beginning of the payment.
a. Differed annuity
b. Delayed annuity
c. Progressive annuity
d. Simple annuity
12. A debt of Php 10,000.00 with 10% interest compounded semi-annually is to
be amortized by semi-annual payments over the next 5 years. The first due is 6
months. Determine the semi-annual payments.
a. Php 1,200.00
b. Php 1,295.00
c. Php 1,193.00
d. Php 1,400.45
13. If you borrowed money from your friend with simple interest of 12%, find the
present worth of Php 50,000.00 which is due at the end of 7 months.
a. Php 46,200.00
b. Php 44,893.00
c. Php 46,730.00
d. Php 45,789.00
14. A loan of Php 5,000.00 is made for a period of 15 months at a simple interest
rate of 15%. What future amount is due at the end of a loan period?
a. Php 5,637.00
b. Php 5,900.00
c. Php 5,937.00
d. Php 5,842.54
15. It is the worth of a property as recorded in the book of an enterprise.
a. Salvage value
b. Price
c. Book value
d. Scrap Value