MCQ in Engineering Economics

1. First Benchmark Publishing’s gross margin is 50% of sales. The operating costs of the publishing are estimated at 15% of sales. If
the company is within the 40% tax bracket, determine the percent of sales is their profit after taxes?

A. 21 %
B. 20 %
C. 19 %
D. 18 %
2. A farmer selling eggs at 50 pesos a dozen gains 20%. If he sells the eggs at the same price after the costs of the eggs rises by
12.5%, how much will be his new gain in percent?
A. 6.89 %
B. 6.65 %
C. 6.58 %
D. 6.12 %
3. A feasibility study shows that a fixed capital investment of P10,000,000 is required for a proposed construction firm and an
estimated working capital of P2,000,000. Annual depreciation is estimated to be 10% of the fixed capital investment. Determine the
rate of return on the total investment if the annual profit is P3,500,000.
A. 38.33 %
B. 29.17 %
C. 30.12 %
D. 30.78 %
4. The monthly demand for ice cans being manufactured by Mr. Camus is 3200 pieces. With a manual operated guillotine, the unit
cutting cost is P25.00. An electrically operated hydraulic guillotine was offered to Mr. Camus at a price of P275,000.00 and which cuts
by 30% the unit cutting cost. Disregarding the cost of money, how many months will Mr. Camus be able to recover the cost of the
machine if he decides to buy now?

A. 10 months
B. 11 months
C. 12 months
D. 13 months
5. Engr. Trinidad loans 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, she has 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 %
6. 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?
A. 5,937.50
B. 5,873.20
C. 5,712.40
D. 5,690.12
7. Mr. Bacani 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.
A. 12.19 %
B. 12.03 %
C. 11.54 %
D. 10.29 %
8. A college freshman borrowed P2,000 from a bank for his tuition fee and promised to pay the amount for one year. He received only
the amount of P1,920 after the bank collected the advance interest of P80.00. What was the rate of discount?

A. 3.67 %
B. 4.00 %
C. 4.15 %
D. 4.25 %
 9. 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 %
10. 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 %
11. A investor 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 %
12. 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. 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. P18,000
B. P18,900
C. P19,000
D. P19,100
13. Miss Evilla borrowed money from a bank. She 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 or often referred to as the “banker’s discount”.

A. 13.15 %
B. 13.32 %
C. 13.46 %
D. 13.73 %
14. 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 %
15. What is the ordinary interest on P1,500.50 for 182 days at 5.2%?
A. P39.01
B. P39.82
C. P39.45
D. P39.99
16. A loan for P50,000 is to be paid in 3 years at the amount of P65,000. What is the effective rate of money?
A. 9.01 %
B. 9.14 %
C. 9.31 %
D. 9.41 %
17. 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 %
 18. What rate of interest compounded annually is the same as the rate of interest of 8% compounded quarterly?
A. 8.07 %
B. 8.12 %
C. 8.16 %
D. 8.24 %
19. Which of these gives the lowest effective rate of interest?
A. 12.35% compounded annually
B. 11.90% compounded annually
C. 12.20% compounded annually
D. 11.60% compounded annually
20. 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%
21. How long will it take money to double itself if invested at 5% compounded annually?
A. 13.7 years
B. 14.7 years
C. 14.2 years
D. 15.3 years
22. 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% compounded quarterly?
A. 11.23 years
B. 11.46 years
C. 11.57 years
D. 11.87 years
23. 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
24. Mandarin Bank advertises 9.5% account that yields 9.84% annually. Find how often the interest is compounded.

A. Monthly
B. Bimonthly
C. Quarterly
D. Annually
25. A student plans to deposit P1,500 in the bank now and another P3,000 for the next 2 years. If he 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 10%.
A. P1,549.64
B. P1,459.64
C. P1,345.98
D. P1,945.64
26. You borrow P3,500.00 for one year from a friend at an interest rate of 1.5% per month instead of taking a loan from a bank at a
rate of 18% per year. How much lesser you will pay by borrowing the money from the bank?
A. P62.44
B. P44.55
C. P54.66
D. P37.56
27. What is the present worth of two P 100 payments at the end of the third year and fourth year? The annual interest rate is 8%.

A. P 150.56
B. P 152.88
C. P 153.89
 D. P 151.09
28. A firm borrows P2,000 for 6 years at 8%. At the end of 6 years, it renews the loan for the amount due plus P2,000 more for 2
years at 8%. What is the lump sum due?
A. P 3,260.34
B. P 3,280.34
C. P 3,270.34
D. P 3,250.34
29. In year zero, you invest P 10,000.00 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?
A. P 15,030.03
B. P 20,113.57
C. P 18,289.05
D. P 16,892.34
30. The institute of Electronics and Communications Engineers of the Philippines (IECEP) is planning to put up its own building. Two
proposals being considered are:
A. The construction of the building now to cost P 400,000
B. 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 P 200,000.

By how much is proposal B more economical than proposal A if interest rate is 20% and depreciation to be neglected?

A. P 19,122.15
B. P 19,423.69
C. P 19,518.03
D. P 19,624.49
31. 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. P 727.17
B. P 717.17
C. P 714.71
D. P 731.17
32. What annuity is required over 12 years to equate with a future amount of P 20,000? Assume i= 6% annually.
A. P 1,290.34
B. P 1,185.54
C. P 1,107.34
D. P 1,205.74
33. A factory operator bought a diesel generator set for P 10,000.00 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. P 2,500.57
B. P 2,544.45
C. P 2,540.56
D. P 2,504.57
34. What is the present worth of a year annuity paying P 3,000.00 at the end of each year, with interest at 8% compounded
annually?
A. P 7,654.04
B. P 7,731.29
C. P 7,420.89
D. P 7,590.12
35. A man loans P 187,400 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. P 43,600.10
B. P 43,489.47
C. P 43,263.91
D. P 43,763.20
36. A person buys a piece of lot for P 100,000 downpayment and 10 deferred semi-annual payments 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. P 142,999.08
B. P 143,104.89
C. P 142,189.67
D. P 143,999.08
37. A young engineer borrowed P 10,000 at 12% interest and paid P 2,000 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. P 6,999.39
B. P 6,292.93
C. P 6,222.39
D. P 6,922.93
38. Miss Calledo deposited P 1,000, P 1,500 and P 2,000 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. P 4,880.00
B. P 4,820.00
C. P 4,860.00
D. P 4,840.00
39. A P 1,000,000 issue of 3%, 15-year bond was sold at 95%. What is the rate of interest of this investment?
A. 3.0%
B. 3.4%
C. 3.7%
D. 4.0%
40. A P 1, 000, 6% bond pays dividend semiannually and will be redeemed at 110% on June 21, 204. It is bought on June 21, 2001
to yield 4% interest. Find the price of the bond.
A. P 1,122.70
B. P 1,144.81
C. P 1,133.78
D. P 1,155.06
41. A VOM has a selling price of P 400. If its selling price is expected to decline at a rate of 10% per annum due to obsolescence,
what will be its selling price after 5 years?
A. P 222.67
B. P 212.90
C. P 236.20
D. P 231.56
42. A machine costs of P 8,000 and an estimated life of 10 years with a salvage value of P 500. What is its book value after 8 years
using straight line method?
A. P 2,000.00
B. P 2,100.00
C. P 2,200.00
D. P 2,300.00
43. ABC Corporation makes it a policy that for any new equipment purchased, the annual depreciation cost should not exceed 20% of
the first cost at any time with no salvage value. Determine the length of service life necessary if the depreciation used is the SYD
method.
A. 7 eyars
B. 8 years
C. 9 years
D. 10 years
44. An asset is purchased for P 9,000.00. Its estimated economic life is 10 years after which it will be sold for P 1,000.00. Find the
depreciation in the first three years using sum-of-years digit method
A. P 3,279.27
B. P 3,927.27
C. P 3,729.27
D. P 3,792.72
45. Shell Philippines, a multinational company, has a total gross income for a particular year of P 50,000,000. The taxable income
after taking all deductions except for depletion is P 18,500,000. What is the allowable depletion allowance for that particular year?
Take percentage of gross income for oil as 22%.
A. P 9,358.41
 B. P 9,228.45
C. P 9,250.00
D. P 9,308.45
46. The Saudi Arabian Oil Refinery developed an oil well which is estimated to contain 5,000,000 barrels of oil at an initial cost of $
50,000,000. What is the depletion charge during the year where it produces half million barrels of oil? Use Unit or Factor method in
computing depletion.
A. $ 5,000,000.00
B. $ 5,010,000.00
C. $ 5,025,000.00
D. $ 5,050,000.00
47. A manufacturer produces certain items at a labor cost of P 115 each, material cost of P 76 each and variable cost of P 2.32 each.
If the item has a unit price of P 600, how many units must be manufactured each month for the manufacturer to break even if the
monthly overhead is P428,000
A. 1,033
B. 1,037
C. 1,043
D. 1,053
48. A manufacturing firm maintains one product assembly line to produce signal generators. Weekly demand for the generators is 35
units. The line operates for 7 hours per day, 5 days per week. What is the maximum production time per unit in hours required of the
line to meet the demand?
A. 1.0 hour per unit
B. 1.2 hours per unit
C. 1.4 hours per unit
D. 1.6 hours per unit
49. A telephone switchboard 100 pair cable can be made up with either enameled wire or tinned wire. There will be 400 soldered
connections. The cost of soldering a connection on the enameled wire will be P 1.65 on the tinned wire, it will be P 1.15. A 100- pair
cable made up with enameled wire cost P 0.55 per linear foot and those made up
of tinned wire cost P 0.75 per linear foot. Determine the length of cable run in feet so that the cost of each installation would be the
same.
A. 1,000 feet
B. 1,040 feet
C. 1,100 feet
D. 1,120 feet
50. A leading shoe manufacturer produces a pair of Lebron James signature shoes at a labor cost of P 900.00 a pair and a material
cost of P 800.00 a pair. The fixed charges on the business are P 5,000,000 a month and the variable costs are P 400.00 a pair.
Royalty to Lebron James is P 1,000 per pair of shoes sold. If the shoes sell at P 5,000 a pair, how many pairs must be produced each
month for the manufacturer to break-even?

A. 2.590
B. 2,632
C. 2,712
D. 2,890
51. What is defines as the analysis and evaluation of the monetary consequences by using the theories and principles of economics
to engineering applications, designs and projects?
A. Economic Analysis
B. Engineering cost analysis
C. Engineering economy
D. Design cost analysis
Answer: Option A
52. What is considered as the standard unit which forms the basis of a country’s domestic money supply?
A. Monetary unit
B. Currency
C. Foreign exchange
D. Cash or check
Answer: Option C
53. What is defined as any tangible economic product that contributes directly or indirectly to the satisfaction of human want?
A. Services
B. Goods
C. Commodities
D. Goods or commodities
Answer: Option D
54. What is defined as any tangible economic activity that contributes directly or indirectly to the satisfaction of human want?
A. Services
B. Goods
C. Commodities
D. Goods or commodities
Answer: Option A
55. What are the two classifications of goods and services?
A. Local and imported
B. Raw and finished
C. Consumer and producer
D. Ready-made and made-to-order
Answer: Option C
56. What refers to the goods and services that are required to support human life, needs and activities?
A. Producer products
B. Consumer products
C. Luxury
D. Necessity
Answer: Option D
57. What refers to the goods and services that are desired by human and will be acquired only after all the needs have been
satisfied?
A. Producer products
B. Consumer products
C. Luxury
D. Necessity
Answer: Option C
58. What refers to the exchange mechanism that brings together the sellers and the buyers of a product, factor of production or
financial security?
A. Mall
B. Market
C. Store
D. Office
Answer: Option B
59. What is considered as the basic consuming or demanding unit of a commodity?
A. Seller
B. Manufacturer
C. Producer
D. Buyer or consumer
Answer: Option D
60. What is defined as an entity which makes product, good or services available to buyer or consumer in exchange of monetary
consideration?
A. Seller
B. Manufacturer
C. Producer
D. Buyer or consumer
Answer: Option C
61. What is a market situation whereby there is only one buyer of an item for which there is no goods substitute?
A. Monopsony
B. Monopoly
C. Oligopoly
D. Oligopsony
Answer: Option A
62. What market situation exists where there are few sellers and few buyers?
A. Oligopoly
B. Oligopsony
C. Bilateral oligopoly
D. Bilateral Oligopsony
Answer: Option C
63. What market situation exists where there is only one buyer and only one seller?
A. Monopsony
B. Monopoly
C. Bilateral monopsony
D. Bilateral monopoly
Answer: Option D
64. What is the market situation exist when there are many buyers and many sellers?
A. Perfect competition
B. Oligopoly
C. Oligopsony
D. Monopoly
Answer: Option A
65. If there is only one seller and many buyers, the market situation is                    .
A. Duopsony
B. Oligopoly
C. Oligopsony
D. Monopoly
Answer: Option D
66. If there are many sellers and few buyers, the market situation is                      .
A. Duopsony
B. Oligopoly
C. Oligopsony
D. Monopoly
Answer: Option C
67. Oligopoly exists when there is/are:
A. Few sellers and few buyers
B. Few sellers and many buyers
C. Many sellers and few buyers
D. One seller and few buyers
Answer: Option B
68. Duopsony is a market situation where there is/are:
A. Few sellers and few buyers
B. Few sellers and many buyers
C. Many sellers and few buyers
D. One seller and few buyers
Answer: Option C
69. Duopoly is a market situation where there is/are:
A. Few sellers and few buyers
B. Few sellers and many buyers
C. Many sellers and few buyers
D. One seller and few buyers
Answer: Option B
70. What is another term for “perfect competition”?
A. Atomistic competition
B. No-limit competition
C. Free-for-all competition
D. Heterogeneous market
Answer: Option A
71. What refers to the market situation in which any given product is supplied by a very large number of vendors and there is no
restriction against additional vendors from entering the market?
A. Perfect competition
B. Oligopoly
C. Oligopsony
D. Monopoly
Answer: Option A
72. Aside from many sellers and many buyers, which one is a characteristic of perfect competition?
A. Homogeneous product
B. Free market entry and exit
C. Perfect information and absence of all economic friction
D. All of these
Answer: Option D
73. What is the opposite of perfect competition?
A. Monopsony
B. Oligopoly
C. Oligopsony
D. Monopoly
Answer: Option D
74. Perfect monopoly exists only if:
A. the single vendor can prevent the entry of all other vendors in the market
B. the single vendor gets the absolute franchise of the product
C. the single vendor is the only one who has the permit to sell
D. the single vendor is the only one who has the knowledge of the product
Answer: Option A
75. A               is a market situation where economies of scale are so significant that cost are only minimized when the entire output
of an industry is supplied by a single producer so that the supply costs are lower under monopoly that under perfect competition.
A. Perfect monopoly
B. Bilateral monopoly
C. Natural monopoly
D. Ordinary monopoly
Answer: Option C
76. “When one of the factors of production is fixed in quantity or is difficult to increase, increasing the other factors of production will
result in a less than proportionate increase in output”. This statement is known as the:
A. Law of diminishing return
B. Law of supply
C. Law of demand
D. Law of supply and demand
Answer: Option A
77. What refers to the need, want or desire for a product backed by the money to purchase it?
A. Supply
B. Demand
C. Product
D. Good
Answer: Option B
78. What refers to the amount of a product made available for sale?
A. Supply
B. Demand
C. Product
D. Good
Answer: Option A
79. “Under conditions of perfect competition, the price at which any given product will be supplied and purchased is the price that will
result in the supply and the demand being equal.” This statement is known as the:
A. Law of diminishing return
B. Law of supply
C. Law of demand
D. Law of supply and demand
Answer: Option D
80. What do you call any particular raw material or primary product such as cloth, wool, flour, coffee, etc.?
A. Utility
B. Necessity
C. Commodity
D. Stock
Answer: Option C
81. What is defined as the interest on a load or principal that is based only on the original amount of the loan or principal?
A. Effective rate of interest
B. Nominal rate of interest
C. Compound interest
D. Simple interest
Answer: Option D
82. Under ordinary simple interest, how many days in one year?
A. 300
B. 360
C. 365
D. 366
Answer: Option B
83. One banker’s year is equivalent to               days.
A. 300
B. 360
C. 365
D. 366
Answer: Option B
84. What refers to the cumulative effect of elapsed time on the money value of an event, based on the earning power of equivalent
invested funds capital should or will earn?
A. Present worth factor
B. Interest rate
C. Time value of money
D. Yield
Answer: Option C
85. The difference between the present and future worth of money at some time in the future is called              .
A. Discount
B. Deduction
C. Inflation
D. Depletion
Answer: Option A
86. What refers to the present worth of the probable future net earnings?
A. Total fair value
B. Total market value
C. Going concern value
D. Earning value
Answer: Option D
87. What refers to the amount of money paid for the use of borrowed capital?
A. Interest
B. Rate of interest
C. Simple interest
D. Principal
Answer: Option A
88. What refers to the ratio of the interest payment to the principal for a given unit of time and usually expressed as a percentage of
the principal?
A. Return of investment
B. Interest rate
C. Yield
D. Rate of return
Answer: Option B
89. What is defined as the investment of loan or principal which is based not only on the original amount of the loan or principal but
the amount of loaned or principal plus the previous accumulated interest?
A. Effective rate of interest
B. Nominal rate of interest
C. Compound interest
D. Simple interest
Answer: Option C
90. What refers to the cost of borrowing money or the amount earned by a unit principal per unit time?
A. Yield rate
B. Rate of return
C. Rate of interest
D. Economic return
Answer: Option C
91. A uniform series of payment occurring at equal interval of time is called              .
A. Annuity
B. Amortization
C. Depreciation
D. Bond
Answer: Option A
92. What is the term for an annuity with a fixed time span?
A. Ordinary annuity
B. Perpetuity
C. Annuity certain
D. Annuity due
Answer: Option C
93. What is the type of annuity where the payments are made at the end of each period starting from the first period?
A. Ordinary annuity
B. Perpetuity
C. Annuity due
D. Deferred annuity
Answer: Option A
94. What is the type of annuity where the payments are made at the beginning of the each period starting from the first period?
A. Ordinary annuity
B. Perpetuity
C. Annuity due
D. Deferred annuity
Answer: Option C
95. What is the type of annuity that does not have a fixed time span but continues indefinitely or forever?
A. Ordinary annuity
B. Perpetuity
C. Annuity due
D. Deferred annuity
Answer: Option B
96. What is the type of annuity where the first payment does not begin until some later date in the cash flow?
A. Ordinary annuity
B. Perpetuity
C. Annuity due
D. Deferred annuity
Answer: Option D
97. Which is NOT an essential element of an ordinary annuity?
A. The amounts of all payments are equal.
B. The payments are made at equal interval of time.
C. The first payment is made at the beginning of the first period.
D. Compound interest is paid on all amounts in the annuity.
Answer: Option C
98. What is defined as a financial security note issued by business or corporation and by the government as a means of borrowing
long-term fund?
A. T-bills
B. Securities
C. Bond
D. Bank notes
Answer: Option C
99. What refers to the present worth of all the amount the bondholder will receive through his possession of the bond?
A. Par value of bond
B. Face value of bond
C. Redeemed value of bond
D. Value of bond
Answer: Option D
100. What is defined as the certificate of indebtedness of corporation usually for a period not less than 10 years and guaranteed by
a mortgage on certain assets of a corporation?
A. Bond
B. T-bills
C. Stock
D. Promissory note
Answer: Option A
101. What refers to a document that shows proof of legal ownership of a financial security?
A. Bond
B. Bank note
C. Coupon
D. Check
Answer: Option C
102. What type of bond is issued jointly by two or more corporations?
A. Mortgage bond
B. Joint bond
C. Tie-up bond
D. Trust bond
Answer: Option B
103. What type of bond whose guaranty is in lien on railroad equipment, such as freight and passenger cars, locomotives, etc.?
A. Railroad bond
B. Equipment obligation bond
C. Equipment bond
D. Equipment trust bond
Answer: Option B
104. A type of bond to which are attached coupons indicating the interest due and the date when such interest is to be paid is called
             .
A. Registered bond
B. Coupon bond
C. Mortgage bond
D. Collateral trust bond
Answer: Option B
105. What bond whose security is a mortgage on certain specified assets of the corporation?
A. Registered bond
B. Collateral trust bond
C. Mortgage bond
D. Debenture bond
Answer: Option C
106. A bond without any security behind them except a promise to pay by the issuing corporation is called              .
A. Joint bond
B. Debenture bond
C. Trust bond
D. Common bond
Answer: Option B
107. A type of bond where the corporation pledges securities which it owns such as the stock or bonds of one of its subsidiaries.
A. Mortgage bond
B. Joint bond
C. Security bond
D. Collateral trust bond
Answer: Option D
108. What type of bond where the corporation’s owner name are recorded and the interest is paid periodically to the owners with
their asking for it?
A. Preferred bond
B. Registered bond
C. Incorporators bond
D. Callable bond
Answer: Option B
109. What type of bond which can be redeemed before maturity date?
A. Preferred bond
B. Registered bond
C. Incorporators bond
D. Callable bond
Answer: Option D
110. What is the feature of some bonds whereby the issuer can redeem it before it matures?
A. Return clause
B. Callability
C. Recall clause
D. Call class
Answer: Option B
111. The price at which the callable bond will be redeemed from the bondholder is called              .
A. Par value
B. Call value
C. Face value
D. Redemption value
Answer: Option B
112. What is defined as the reduction or fall of the value of an asset due to constant use and passage of time?
A. Depletion
B. Inflation
C. Depreciation
D. Deflation
Answer: Option C
113. In what method of computing depreciation where it assumes that the loss in value is directly proportional to the age of the
equipment or asset?
A. Straight line method
B. Sinking fund method
C. Sum-of-year digit method
D. Declining balance method
Answer: Option A
114. In what method of computing depreciation where it assumes that a sinking fund is established in which funds will accumulate
for replacement purposes?
A. Straight line method
B. Sinking fund method
C. Sum-of-year digit method
D. Declining balance method
Answer: Option B
115. In what method of computing depreciation where it assumes that the annual cost of depreciation is a fixed percentage of the
book value at the beginning of the year?
A. Straight line method
B. Sinking fund method
C. Sum-of-year digit method
D. Declining balance method
Answer: Option D
116. In SYD method of computing depreciation, which of the following is the formula in finding the sum of years’ digits?
A. n(n-1)
B. [n(n+2)]/2
C. [n(n-1)]/2
D. [n(n+1)]/2
Answer: Option D
117. The declining balance method is also known as              .
A. Double percentage method
B. Constant percentage method
C. Modified sinking fund method
D. Modified SYD method
Answer: Option B
118. What type of depreciation is due to the reduction in the demand for the function that the equipment or asset was designed to
render?
A. Functional depreciation
B. Design depreciation
C. Physical depreciation
D. Demand depreciation
Answer: Option A
119. What type of depreciation is due to the reduction of the physical ability of an equipment or asset to produce results?
A. Functional depreciation
B. Design depreciation
C. Physical depreciation
D. Demand depreciation
Answer: Option C
120. The functional depreciation is sometimes called              .
A. Demand depreciation
B. Adolescence
C. Life depreciation
D. Failure depreciation
Answer: Option B
121. What is defined as the reduction of the value of certain natural resources such as mines, oil, timber, quarries, etc. due to the
gradual extraction of its contents?
A. Depletion
B. Inflation
C. Depreciation
D. Deflation
Answer: Option A
122. What are the common methods of computing depletion charge?
A. Rational method and irrational method
B. Conservative method and conventional method
C. Unit method and percentage method
D. Discrete method and depletion allowance method
Answer: Option C
123. Under the depletion allowance method in computing depreciation, the depletion charge is equal to either               whichever is
smaller.
A. Fixed percentage of gross income or the net taxable income
B. Fixed percentage of gross income or 50% of the net taxable income
C. 50% of the fixed percentage of gross income or 50% of the net taxable income
D. 50% of the fixed percentage of gross income or the net taxable income
Answer: Option B
124. The depletion allowance method of computing depletion is commonly known as              .
A. Unit method
B. Percentage method
C. Factor method
D. Sinking fund method
Answer: Option B
125. What is another term for “unit method” for computing depletion?
A. Initial cost method
B. Percentage method
C. Factor method
D. Sinking fund method
Answer: Option C
126. Using factor method, the depletion at any given year is equal to:
A. Initial cost of property times number of unit sold during the year divided by the total units in property
B. Initial cost of property divided by the number of units sold during the year
C. Initial cost of property times number of units sold during the year
D. Initial cost of property divided by the total units in property
Answer: Option A
127. What do you call the after-tax present worth of all depreciation effects over the depreciation period of the asset?
A. Asset recovery
B. Depreciation recovery
C. Period recovery
D. After-tax recovery
Answer: Option B
128. A mathematical expression also known as the present value of annuity of one is called              .
A. Load factor
B. Demand factor
C. Sinking fund factor
D. Present worth factor
Answer: Option D
129. The amount of property in which a willing buyer to a willing seller for the property when neither one is under the compulsion to
buy nor to sell is called              .
A. Fair value
B. Market value
C. Good will value
D. Book value
Answer: Option B
130. Salvage value is sometimes known as              .
A. Scrap value
B. Going value
C. Junk value
D. Second-hand value
Answer: Option D
131. What refers to the value of an asset which a disinterested third party, different from the buyer and seller, will determine in order
to establish a price acceptable to both parties?
A. Book value
B. Market value
C. Fair value
D. Franchise value
Answer: Option C
132. What refers to the value of an intangible item which arises from the exclusive right of a company to provide a specified product
and service in a certain region of the country?
A. Company value
B. Going value
C. Goodwill value
D. Franchise value
Answer: Option D
133. The first cost to be incurred if the piece of equipment now in place had been bought for a second hand dealer or some other
business is called              .
A. Material cost
B. Fixed cost
C. First cost
D. In-place value
Answer: Option D
134. In computing depreciation of an equipment, which of the following represents the first cost?
A. The original purchase price and freight charges
B. Installation expenses
C. Initial taxes and permit fees
D. All of these
Answer: Option D
135. The process of determining the value or worth of a physical property for specific reason is called              .
A. Investment
B. Valuation
C. Economy
D. Depletion
Answer: Option B
136. The unrecovered depreciation which results due to poor estimates as to the life of the equipment is called              .
A. Sunk cost
B. Economic life
C. In-place value
D. Annuity
Answer: Option A
137. What refers to the present worth of cost associated with an asset for an infinite period of time?
A. Annual cost
B. Increment cost
C. Capitalized cost
D. Operating cost
Answer: Option C
138. Capitalized cost of a project is also known as              .
A. Infinite cost
B. Life cycle cost
C. Life cost
D. Project cost
Answer: Option B
139. What is normally used to compare alternatives that accomplish the same purpose but have unequal lives?
A. Capitalized cost method
B. Present worth method
C. Annual cost method
D. MARR
Answer: Option C
140. What method is often used in municipal project evaluations where benefits and costs accrue to different segments of the
community?
A. Annual cost method
B. Benefit-cost ratio
C. Rate of return method
D. EUAC
Answer: Option B
141. What refers to an imaginary cost representing what will not be received if a particular strategy is rejected?
A. Opportunity cost
B. Ghost cost
C. Horizon cost
D. Null cost
Answer: Option A
142. What is the main reason why the sinking fund method of computing depreciation is seldom used in the industry?
A. Unstable economy
B. Rate of interest cannot be exactly determined
C. The initial deprecation is high
D. The initial depreciation is low
Answer: Option D
143. What is the factor name of the formula (1+i)^-n?
A. Uniform gradient future worth
B. Capital recovery
C. Single payment present worth
D. Single payment compound amount
Answer: Option C
144. What is the factor name of the formula [i(1+i)^n]/[((1+i)^n)-1]?
A. Uniform series sinking fund
B. Capital recovery
C. Single payment present worth
D. Uniform gradient future worth
Answer: Option B
145. A form of business organization in which a person conducts his business alone and entirely for his own profit, being solely
responsible for all its activities and liabilities.
A. Sole proprietorship
B. Entrepreneurship
C. Partnership
D. Corporation
Answer: Option A
146. Is an artificial being created by operation of law, having the right of succession and the process, attributes and properties
expressly authorized by the law or incident to its existence.
A. Corporation
B. Property
C. Partnership
D. Organization
Answer: Option A
147. What is the simplest form of business organization?
A. Sole proprietorship
B. Partnership
C. Enterprise
D. Corporation
Answer: Option A
148. Double taxation is a disadvantage of which business organization?
A. Sole proprietorship
B. Partnership
C. Corporation
D. Enterprise
Answer: Option C
149. In case of bankruptcy of a partnership,
A. The partners are not liable for the liabilities of the partnership
B. The partnership assets (excluding the partners personal assets) only will be used to pay the liabilities
C. The partners personal assets are attached to the debt of the partnership
D. The partners nay sell stock to generate additional capital
Answer: Option B
150. Which is true about partnership?
A. It has a perpetual life.
B. It will be dissolved if one of the partners ceases to be connected with the partnership.
C. It can be handed down from one generation of partners to another.
D. Its capitalization must be equal for each partner.
Answer: Option C
151. Which is true about corporation?
A. It is worse type of business organization.
B. The minimum number of incorporators to start a corporation is three.
C. Its life is dependent on the lives of the incorporators.
D. The stock holders of the corporation are only liable to the extent of their investments.
Answer: Option D
152. Aggregation of individuals formed for the purpose of conducting a business and recognized by law as a fictitious person is
called              .
A. Partnership
B. Investors
C. Corporation
D. Stockholders
Answer: Option C
153. An association of two or more persons for the purpose of engaging into a business for profit is called              .
A. Entrepreneurship
B. Partnership
C. Proprietorship
D. Corporation
Answer: Option B
154. What represents the ownership of stockholders who have a residual claim on the assets of the corporation after all other claims
have been settled?
A. Authorized capital stock
B. Preferred stock
C. Incorporator stock
D. Common stock
Answer: Option D
155. What stock represents ownership and enjoys certain preferences than ordinary stock?
A. Authorized stock
B. Preferred stock
C. Incorporator’s stock
D. Presidential stock
Answer: Option B
156. The amount of company’s profit that the board of directors of the corporation decides to distribute to ordinary shareholders is
called              .
A. Dividend
B. Return
C. Share of stock
D. Equity
Answer: Option A
157. What refers to the residual value of a company’s assets after all outside liabilities (shareholders excluded) have been allowed
for?
A. Dividend
B. Equity
C. Return
D. Par value
Answer: Option B
158. What refers to the claim of anyone to ownership?
A. Proprietorship
B. Assets
C. Equity
D. Liability
Answer: Option C
159. Cash money and credit necessary to establish and operate an enterprise are generally called              .
A. Capital
B. Funds
C. Assets
D. Liabilities
Answer: Option A
160. What represents the share of participation in business organizations?
A. Franchise
B. Partnership
C. Stock
D. Corporation
Answer: Option C
161. The profit derived from a project or business enterprise without consideration of obligations to financial contributors and claims
of others based on profit is known as              .
A. Yield
B. Economic return
C. Earning value
D. Gain
Answer: Option B
162.               is the element of value which a business has earned through the favorable consideration and patronage of its
costumers arising from its well known and well conducted policies and operations.
A. Status company
B. Big income
C. Known owners
D. Goodwill
Answer: Option D
163. Which of the following is an example of intangible asset?
A. Cash
B. Investment in subsidiary companies
C. Furniture
D. Patents
Answer: Option D
164. Lands, buildings, plants and machineries are example of what type of asset?
A. Current asset
B. Trade investment asset
C. Fixed asset
D. Intangible asset
Answer: Option C
165. What refers to the interest rate at which the present work of the cash flow on a project is zero of the interest earned by an
investment?
A. Economic return
B. Yield
C. Rate of return
D. Return of investment
Answer: Option C
166. What is another term for “current assets”?
A. Fixed assets
B. Non-liquid assets
C. Liquid assets
D. Ccash
Answer: Option C
167. What is an accounting term that represents an inventory account adjustment?
A. Cost of goods sold
B. Cost accounting
C. Standard cost
D. Overhead cost
Answer: Option A
168. What is the change in cost per unit variable change called?
A. Variable cost
B. Incremental cost
C. Fixed cost
D. Supplemental cost
Answer: Option B
169. What is used to record historical financial transactions?
A. Bookkeeping system
B. Ledger system
C. Balance check
D. General journal system
Answer: Option A
170. What is a secondary book of accounts, the information of which is obtained from the journal is called?
A. Balanced sheet
B. Ledger
C. Worksheet
D. Trial balance
Answer: Option B
171. The original record of a business transaction is recorded in this book.
A. Work book
B. Journal
C. Ledger
D. Account book
Answer: Option B
172. All the proceeds which are received by the business as a result of the sale of goods is called              .
A. Net income
B. Gross income
C. Net revenue
D. Total sales
Answer: Option B
173. All are classified under direct labor expenses EXCEPT one. Which one?
A. Inspection cost
B. Testing cost
C. Assembly cost
D. Supervision cost
Answer: Option D
174. What is a measure of the average speed with which accounts receivable are collected?
A. Current ratio
B. Quick ratio
C. Acid test ratio
D. Receivable turnover
Answer: Option D
175. The ratio of the net income before taxes to net sales is called              .
A. Current ratio
B. Inventory turnover
C. Profit margin ratio
D. Price-earnings ratio
Answer: Option C
176. What do you call a one-time credit against taxes?
A. Due credit
B. Tax credit
C. Credible credit
D. Revenue credit
Answer: Option B
177. What is used when a quick estimate of the doubling time for the invested money is needed?
A. Rule of 48
B. Rule of 36
C. Rule of 24
D. Rule of 72
Answer: Option D
178. What is the increase in the money value of a capital asset is called?
A. Profit
B. Capital gain
C. Capital expenditure
D. Capital stock
Answer: Option B
179. What is the reduction in the money value of capital asset is called?
A. Capital expenditure
B. Capital loss
C. Loss
D. Deficit
Answer: Option B
180. What refers to the negotiable claim issued by a bank in lien of a term deposit?
A. Time deposit
B. Bond
C. Capital gain certificate
D. Certificate of deposit
Answer: Option D
181. What denotes in the fall in the exchange rate of one currency in terms of the others? This term is usually applies to the floating
exchange rate.
A. Currency appreciation
B. Currency depreciation
C. Currency devaluation
D. Currency float
Answer: Option B
182. The deliberate lowering of the price of a nation’s currency in terms of the accepted standard (Gold, American dollar or the
British pound) is known as              .
A. Currency appreciation
B. Currency depreciation
C. Currency devaluation
D. Currency float
Answer: Option C
183. What refers to the saving which takes place because goods are not available for consumption rather than consumer really want
to save?
A. Compulsory saving
B. Consumer saving
C. Forced saving
D. All of these
Answer: Option C
184. The flow back of profit plus depreciation form a given project is called              .
A. Capital recovery
B. Cash flow
C. Economic return
D. Earning value
Answer: Option B
185. As applied to capitalized asset, the distribution of the initial cost by a periodic changes to operation as in depreciation or the
reduction of a debt by either periodic or irregular prearranged programs is called              .
A. Annuity
B. Amortization
C. Capital recovery
D. Annuity factor
Answer: Option B
186. Capitalized cost of any structure or property is computed by which formula?
A. First cost + interest of first cost
B. Annual cost – interest of first cost
C. First cost + cost of perpetual maintenance
D. First cost + salvage value
Answer: Option C
187. The true value of interest rate computed by equations for compound interest for a 1 year period is known as              .
A. Expected return
B. Nominal interest
C. Effective interest
D. Economic return
Answer: Option C
188. Return on investment ratio is the ratio of the:
A. Net income to owner’s equity
B. Market price per share to earnings per share
C. Cost of goods sold to average cost of inventory at hand
D. Net credit sales to average net receivable
Answer: Option A
189. Gross margin is the ratio of the gross profit to              .
A. Net sale
B. Owner’s equity
C. Inventory turnover
D. Quick assets
Answer: Option A
190. What is another term for “acid-test ratio”?
A. Current ratio
B. Quick ratio
C. Profit margin ratio
D. Price-earnings ratio
Answer: Option B
191. What is a government bond which has an indefinite life rather than a specific maturity?
A. Coupon
B. T-bill
C. Debenture
D. Consol
Answer: Option D
192. A form of business firm which is owned and run by a group of individuals for their mutual benefit is called              .
A. Cooperative
B. Corporation
C. Enterprise
D. Partnership
Answer: Option A
193. What is a stock of a product which is held by a trade body or government as a means of regulating the price of that product?
A. Stock pile
B. Hoard stock
C. Buffer stock
D. Withheld stock
Answer: Option C
194. The ability to meet debts as they become due is known as              .
A. Solvency
B. Leverage
C. Insolvency
D. Liquidity
Answer: Option A
195. The ability to convert assets to cash quickly is known as              .
A. Solvency
B. Liquidity
C. Leverage
D. Insolvency
Answer: Option B
196. What is the basic accounting equation?
A. Assets = liability + owner’s equity
B. Liability = assets + owners’ equity
C. Owner’s equity = assets + liability
D. Owner’s equity = liability – assets
Answer: Option A
197. The financial health of the company is measured in terms of:
A. Liquidity
B. Solvency
C. Relative risk
D. All of these
Answer: Option D
198. What is an index of short-term paying ability?
A. Price-earnings ratio
B. Current ratio
C. Profit margin ratio
D. Gross margin
Answer: Option B
199. The common ratio is the ratio of:
A. Net credit sales to average net receivable
B. Current assets to current liabilities
C. Gross profit to net sales
D. Net income to owner’s equity
Answer: Option B
200. What is defined as the current assets minus inventories and prepaid expenses?
A. Profit margin ratio
B. Price-earnings ratio
C. Return of investment ratio
D. Quick ratio
Answer: Option D
201. What is the ratio of the quick assets to current liabilities?
A. Profit margin ratio
B. Price-earnings ratio
C. Return of investment ratio
D. Quick ratio
Answer: Option D
202. What is a measure of the average speed with which accounts receivable are collected?
A. Profit margin ratio
B. Receivables turnover
C. Return of investment ratio
D. Average age of receivables
Answer: Option B
203. Receivable turnover is the ratio of:
A. Net credit sales to average net receivables
B. Market price per share to earnings per share
C. Cost of goods sold to average cost of inventory on hand
D. Common shareholders’ equity to number of outstanding shares
Answer: Option A
204. What is the ratio of the net income to owner’s equity?
A. Gross margin
B. Return of investment ratio
C. Book value per share of common stock
D. Inventory turnover
Answer: Option B
205. What is the ratio of the market price per share to earnings per share called?
A. Gross margin
B. Price-earnings ratio
C. Book value per share of common stock
D. Inventory turnover
Answer: Option B
206. What is the profit margin ratio?
A. The ratio of the net income before taxes to net sales
B. The ratio of gross profit to net sales
C. The ratio of common shareholders’ equity to the number of outstanding shares
D. The ratio of cost goods sold to average cost of inventory on hand
Answer: Option A
207. What is a gross margin?
A. The ratio of net income before taxes to net sales
B. The ratio of gross profit to net sales
C. The ratio of common shareholders’ equity to the number of outstanding shares
D. The ratio of cost of goods sold to average cost of inventory on hand
Answer: Option B
208. Which of the following is a book value share of common stock?
A. The ratio of net income before taxes to net sales
B. The ratio of gross profit to net sales
C. The ratio of common shareholders’ equity to the number of outstanding shares
D. The ratio of cost of goods sold to average cost of inventory on hand
Answer: Option C
209. What is an inventory turnover?
A. The ratio of net income before taxes to net sales
B. The ratio of gross profit to net sales
C. The ratio of common shareholders’ equity to the number of outstanding shares
D. The ratio of cost of goods sold to average cost of inventory on hand
Answer: Option D
210. The average age of receivables is computed using which formula?
A. 365 / receivable turnovers
B. 365 / average net receivable
C. 365 / inventory turnover
D. 365 / average cost of inventory on hand
Answer: Option A
211. What is a method of determining when the value of one alternative becomes equal to the value of another?
A. Specific identification method
B. Average cost method
C. Break-even analysis
D. Incremental value method
Answer: Option C
212. The days supply of inventory on hand is calculated using which formula?
A. 365 / receivable turnovers
B. 365 / average net receivable
C. 365 / inventory turnover
D. 365 / average cost of inventory on hand
Answer: Option C
213. What is defined as the length of time usually in years, for cumulative net annual profit to equal the initial investment?
A. Return of investment period
B. Turnover period
C. Break-even period
D. Payback period
Answer: Option D
214. What is defined as ratio of its return to its cost?
A. Return of an investment
B. Value of an investment
C. Breakeven point of an investment
D. Term of an investment
Answer: Option B
215. Which of the following is an accelerated depreciation method?
A. Straight line method and sinking fund method
B. Straight line method and double declining balance method
C. Double declining balance method and SYD method
D. SYD method and sinking fund method
Answer: Option C
216. What is an accelerated depreciation method?
A. It is one that calculates a depreciation amount greater than a straight line amount
B. It is one that calculates a depreciation amount lesser than a straight line amount
C. It is one that calculates a depreciation amount equal to straight line amount
D. It is one that calculates a depreciation not in any way related to straight line amount
Answer: Option A
217. What refers to the reduction in the level of a national income and output usually accompanied by a fall in the general price
level?
A. Deflation
B. Inflation
C. Devaluation
D. Depreciation
Answer: Option A
218. A formal organization of producers within an industry forming a perfect collusion purposely formed to increase profit and block
new comers form the industry is called              .
A. Monopoly
B. Cartel
C. Corporation
D. Competitors
Answer: Option B
219. The paper currency issued by the central bank which forms part of the country’s money supply is called              .
A. T-bills
B. Bank notes
C. Check
D. Coupon
Answer: Option B
220. “When one of the factors of production is fixed in quantity or is difficult to increase, increasing the other factors of production will
result in a less than proportionate increase in output”.
A. Law of diminishing return
B. Law of supply
C. Law of demand
D. Law of supply and demand
Answer: Option A
221. What is the ratio of the market price per share to the earnings per share?
A. Inventory turnover
B. Price-earnings
C. Book value per share of common stock
D. Profit margin
Answer: Option B
222. What is the ratio of the net income to owner’s equity?
A. Return on investment
B. Inventory turnover
C. Profit margin
D. Price-earnings
Answer: Option A
223. What refers to the ration of the net income before taxes to net sales?
A. Receivable turnover
B. Acid test ratio
C. Return on investment
D. Profit margin
Answer: Option D
224. What refers to the buying or selling of goods between two or more markers in order to take profitable advantage of any
differences in the prices quoted in these markets?
A. Cartel
B. Arbitrage
C. Black market
D. A priori
Answer: Option B
225. The suspension of repayment of debt or interest for a specified period of time is called              .
A. Moratorium
B. Escrow
C. Numeraire
D. Porcupine
Answer: Option A
226. The discount of one unit of principal for one unit of time.
a. Rate discount
b. Nominal discount
c. Actual discount
d. Sales discount
Answer: Option A
227. An annuity whereby the payment is postponed for a certain period of time is?
a. Ordinary annuity
b. Suspended annuity
c. Deferred annuity
d. Annuity due
Answer: Option C
228. The actual interest earned by a given principal is known as?
a. Compounded interest
b. Nominal interest
c. Simple interest
d. Effective interest
Answer: Option D
229. A bond where the security behind it are the equipment of the issuing corporation.
a. Debenture
b. Mortgage
c. Collateral
d. Lien
Answer: Option D
230. Characterized by a few supplies of a product/services that the action by one will almost inevitably result in the similar action by
the other.
a. Monopoly
b. Oligopoly
c. Competition
d. Necessity
Answer: Option B
231. It is the worth of a property as shown on the accounting records.
a. Resale value
b. Face value
c. Book value
d. Written value
Answer: Option C
232. The decrease in the value of a property due to gradual extraction of its contents.
a. Depreciation
b. Depletion
c. Devaluation
d. Deviation
Answer: Option B
233. It is usually determined by a disinterested third party to establish a price good enough to both the seller and the buyer.
a. Fair value
b. Market value
c. Common value
d. Safe value
Answer: Option A
234. The exclusive right of a company to provide a specific product or services in a given region of the country.
a. Outlet
b. Branch
c. Extension
d. Franchise
Answer: Option D
235. It is the sum of the first cost and the present worth of all costs or replacement, operation and maintenance.
a. Total cost
b. Capitalized cost
c. Initial cost
d. Variable cost
Answer: Option B
236. A certificate of indebtedness of a corporation usually for a period not less than 10 years and guaranteed by a mortgage on
certain assets of the corporation or its subsidiaries.
a. Collateral
b. Bond
c. Mortgage
d. Contract
Answer: Option B
237. What the property is worth to the owner as an operating unit.
a. Utility value
b. Present value
c. Salvage value
d. Resale value
Answer: Option A
238. Occurs when a commodity or service is supplied by a number of vendors and there is nothing to prevent additional vendors
entering the market.
a. Free market
b. Perfect competition
c. Open market
d. Law of supply and demand
Answer: Option B
239. In making economy studies a minimum required profit on the invested capital is included as a cost. A method called as
                      .
a. Rate of return
b. Annual cost pattern
c. Present worth pattern
d. Capital cost
Answer: Option B
240. Annuity is required over 10 years to equate to a future amount of P 15, 000 with i=5%
a. P 1, 192.57
b. P 1, 912.75
c. P 1, 219.60
d. P 1, 921.65
Answer: Option A
241. A debt of P 1000 is to be paid off in 5 equal yearly payments, each combining an amortization installment and interest at 4% on
the previously unpaid balance of the debt. What should be the amount of each payment?
a. P 220.50
b. P 224.62
c. P 242.61
d. P 222.50
Answer: Option B
242. P 1000 is deposited in a bank at 7% interest. What is the value of the money after 25 years, assuming that nothing was
deposited after the initial deposit?
a. P 5, 247.63
b. P 5, 437.34
c. P 5, 427.43
d. P 5, 720.51
243. What is the interest due on a P 1500 note for 4 years and 3 month, if it bears 12% ordinary simple interest?
a. P 756
b. P 765
c. P 675
d. P 576
Answer: Option A
244. A P 1000-bond which will mature in 10 years and with a bond rate of 10% payable annually is to be redeemed at P 1040 at the
end of this period. If it is sold now at P 1,120. Determine the yield at this price.
a. 4.68 %
b. 6.48 %
c. 8.64 %
d. 8.46 %
Answer: Option C
245. A company sets aside P 300,000 each year as a fund for expansion. If the fund earns 9% compounded annually, determine
how long will it take before a building costing P 3, 000, 000 can be built?
a. 7.34 years
b. 7.44 years
c. 7.20 years
d. 7.54 years
Answer: Option B
246. Which is NOT an essential element of an ordinary annuity?
A. The amounts of all payments are equal.
B. The payments are made at equal interval of time.
C. The first payment is made at the beginning of each period.
D. Compound interest is paid on all amounts in the annuity.
Answer: Option C
247. 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
Answer: Option A
248. A method of depreciation whereby the amount to recover is spread uniformly over the estimated life of the asset in terms of the
periods or units of output.
A. Straight line method
B. Sinking fund method
C. Declining balance method
D. SYD method
Answer: Option A
249. Which of the following depreciation methods cannot have a salvage value of zero?
A. Declining balance method
B. Sinking fund method
C. Straight line method
D. SYD method
Answer: Option A
250. A method of depreciation where a fixed sum of money is regularly deposited at compound interest in a real or imaginary fund in
order to accumulate an amount equal to the total depreciation of an asset at the end of the asset’s estimated life.
A. Straight line method
B. Sinking fund method
C. Declining balance method
D. SYD method
Answer: Option B
251. 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.
A. 37.11%
B. 40.21%
C. 38.51%
D. 39.31%
Answer: Option A
252. It is the practice of almost all bank in the Philippines that when they grant a loan, the interest for 1 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 the bank and the P80000 was approved at an interest rate of 14% of which
P11200 was deducted and you were given ac check of P68800. Since you have to pay the amount of P80000 one year after, what then will be the effective interest rate?

A. 16.28%
B. 17.30%
C. 38.51%
D. 39.31%
Answer: Option A
253. Mr. J. Dela Cruz borrowed money from the bank. He received from the bank P1,340.00 and promised to pay P1,500.00 at the end of 9 months. Determine the
simple interest rate and the corresponding discount rate or often referred to as the “Banker’s Discount”.

A. 15.92% ; 13.73%
B. 12.95% ; 17.33%
C.18.28% ; 13.12%
D. 19.25% ; 13.33%
Answer: Option A
254. 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 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?
A. 13.64%
B. 16.43%
C.18.37%
D. 10.32%
Answer: Option A
255. Karen was granted a loan of P20,000 by her employer CPM Industrial Fabricator 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 discounted at once, find the proceeds in the note.

A. P18,800
B. P18,000
C. P19,000
D. P18,400
Answer: Option A
256. P4000 is borrowed for 75 days at 16% per annum simple interest. How much will be due at the end of 75 days?
A. P4186.43
B. P4133.33
C. P5124.54
D. P5625.43
Answer: Option B
257. Mr. Bautista made a money market placement of P1,000,000 for 30 days at 7.5% per year. If withholding tax is 20%, what is the
net interest that Mr. Bautista will receive at the end of the month?
A. P3,000
B. P6,000
C. P4,000
D. P5,000
Answer: Option D
258. A bill for motorboat specifies the cost as P1,200 due at the end of 100days but offers a 4% discount for cash in 30days. What is
the highest rate, simple interest at which the buyer can afford to borrow money in order to take advantage of the discount?
A. 18.4%
B. 20.9%
C. 19.6%
D. 21.4%
Answer: Option D
259. In buying a computer disk, the buyer was offered the options of paying P250 cash at the end of 30days or P270 at the end of
120days. At what rate is the buyer paying simple interest if he agree to pay at the end of 120days?
A. 32%
B. 28%
C.40%
D. 25%
Answer: Option A
260. On March 1, 1996 Mr. Sarmiento obtains a loan of P1500 from Mr. Avila and signs a note promising to pay the principal and accumulated simple interest at the rate
of 5% at the end of 120days. On May 15, 1996, Mr. Avila discounts the note at the bank whose discount rate is 6%. What does he receive?

A. P2,201.48
B. P1,513.56
C. P1,123.29
D. P938.20
Answer: Option B
261. A deposit of P110,000 was made for 31days. The net interest after deducting 20% withholding tax is P890.36. Find the rate of
return annually.
A. 12.25
B. 12.75
C. 11.75
D. 11.95
Answer: Option C
262. If you borrowed money from your friend with simple interest of 12%, find the present worth of P50,000 which is due at the end
of 7months.
A. P46,200
B. P46,729
C. P44,893
D. P45,789
Answer: Option B
263. A man borrowed P2000 from a bank and promise to pay the amount for 1year. He received 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. 4% ; 4.17%
B. 4% ; 4.71%
C. 3% ; 3.17%
D. 3% ; 3.71%
Answer: Option A
264. 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.
A. 64.6%
B. 66.6%
C. 65.6%
D. 67.6%
Answer: Option B
265. 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.
A. 18.4%
B. 15.8%
C. 19.6%
D. 16.4%
Answer: Option B
266. Compute the discount if P2000 is discounted for 6 months at 8% simple interest.
A. P29.67
B. P76.92
C. P67.29
D. P92.76
Answer: Option B
267. The amount of P12800 in 4years at 5% compounded quarterly is            .
A. P14,785.34
B. P16,311.26
C. P15,614.59
D. P15,847.33
Answer: Option C
268. 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 respectively. Determine the amount of money that he received from the bank.

A. P1403.68
B. P1102.37
C. P1340.38
D. P1030.28
Answer: Option A
269. 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
Answer: Option B
270. BY the condition of a will, the sum of P2000 is left to a girl to be held in trust fund by her guardian until it amount to P50000.00.
When will the girl receive the money of the fund is invested at 8% compounded quarterly?
A. 7.98 years
B. 11.57 years
C. 10.34 years
D. 10.45 years
Answer: Option B
271. A man expects to receive P25,000 in 8 years. How much is that worth now considering interest at 8% compounded quarterly?
A. P13,859.12
B. P13,675.23
C. P13,958.33
D. P13,265.83
Answer: Option D
272. P500,000 was deposited at an interest of 6% compounded quarterly. Compute the compound interest after 4 years and 9
months.
A. P163,475.37
B. P158,270.37
C. P178,362.37
D. P183,327.37
Answer: Option A
273. If the nominal interest rate is 3%, how much is P5000 worth in 10 years in a continuously compounded account?
A. P5750
B. P7500
C. P6750
D. P6350
Answer: Option C
274. P200,000 was deposited for a period of 4 years and 6 months and bears on interest of P85649.25. What is the rate of interest if
it is compounded quarterly?
A. 8%
B. 7%
C. 6%
D. 5%
Answer: Option A
275. How many years will P100,000 earn a compound interest of P50,000 if the interest rate is 9% compounded quarterly?
A. 3.25 years
B. 5.86 years
C. 4.55 years
D. 2.11 years
Answer: Option C
276. 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. P200,000
B. P240,000
C. P180,000
D. P260,000
Answer: Option A
For Problems 277-279:
When compounded Bi-monthly, P15000 becomes P22,318.30 after 5years.
277. What is the nominal rate of interest?
A. 7%
B. 9%
C. 8%
D. 10%
Answer: Option C
278. What is the equivalent rate if it is compounded quarterly?
A. 7.03%
B. 9.03%
C. 8.03%
D. 10.03%
Answer: Option C
279. What is the effective rate if it is compounded quarterly?
A. 7.28%
B. 9.28%
C. 8.28%
D. 10.28%
Answer: Option C
280. How will it take a money to double itself if invested at 5% compounded annually?
A. 12.2 years
B. 14.2 years
C. 13.2 years
D. 15.2years
Answer: Option B
281. Compute the effective annual interest rate which is equivalent to 5% nominal annual interest compounded continuously.
A. 5.13%
B. 5.26%
C. 4.94%
D. 4.90%
Answer: Option A
282. Find the time required for a sum of money to triple itself at 5% per annum compounded continuously.
A. 21.97 years
B. 18.23 years
C. 25.34 years
D. 23.36 years
Answer: Option A
283. A man wishes to have P40,000 in a certain fund at the end of 8 years. How much should he invest in a fund that will pay 6%
compounded continuously?
A. P24,751.34
B. P28,864.36
C. P36,421.44
D. P30,468.42
Answer: Option A
284. If the effective annual interest rate is 4%, compute the equivalent nominal annual interest compounded continuously.
A. 3.92%
B. 3.80%
C. 4.10%
D. 4.09%
Answer: Option A
285. What is the nominal rate of interest compounded continuously for 10 years if the compound amount factor is equal to 1.34986?
A. 3%
B. 5%
C. 4%
D. 6%
Answer: Option A
286. American Express Corp. charges 1.5% interest per month, compounded continuously on the unpaid balance purchases made
on this credit card. Compute the effective rate of interest.
A. 19.72%
B. 21.20%
C. 20.25%
D. 19.90%
Answer: Option A
287. If the nominal interest is 12% compounded continuously, compute the effective annual rate if interest.
A. 12.75%
B. 12.40%
C. 11.26%
D. 11.55%
Answer: Option A
288. Compute the difference in the future amount of P500 compounded annually at nominal rate of 5% and if it is compounded
continuously for 5 years at the same rate.
A. P3.87
B. P5.48
C. P4.21
D. P6.25
Answer: Option A
289. If the effective rate is 24%, what nominal rate of interest is charged for a continuously compounded loan?
A. 21.51%
B. 23.25%
C. 22.35%
D. 21.90%
Answer: Option A
290. 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%
Answer: Option B
291. 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. P155
B. same
C. P100
D. P50
Answer: Option A
292. Find the discount if P2,000 is discounted for 6 months at 8% compounded quarterly.
A. P76.92
B. P77.66
C. P80.00
D. P78.42
Answer: Option B
293. If a sum of money triples in a certain period of time at a given rate interest, compute the value of the single payment present
worth factor.
A. 0.333
B. 0.292
C. 3.000
D. 1.962
Answer: Option A
294. If the single payment amount factor for a period of 5 years is 1.33822. What is the nearest value of the interest rate?
A. 8%
B. 5%
D. 7%
D. 6%
Answer: Option D
295. If the single payment present worth factor for a period of 8 years is equal to 0.58201, compute the nearest value of the rate of
interest for that period.
A. 6%
B. 5%
C. 7%
D. 8%
Answer: Option C
296. If money is worth 8% compounded quarterly, compute the single payment amount factor for a period of 6 years.
A. 1.60844
B. 1.70241
C. 0.62172
D. 0.53162
Answer: Option A
297. A sum of P1,000 is invested now and left for 8 years, at which time the principal is 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. P507.42
B. P750.42
C. P705.42
D. P425.07
Answer: Option C
For problems 298 – 300:
Compute the interest for an amount of P200,000 for a period of 8 years.
298. If it was made at a simple interest rate of 16% .
A. P274,000
B. P256,000
C. P265,000
D. P247,000
Answer: Option B
299. If it was made at 16% compounded bi-monthly.
A. P507,267.28
B. P407,283.01
C. P507,365.96
D. P459,923.44
Answer: Option C
300. If it was made at 16% compounded continuously.
A. P422,462.64
B. P524,242.46
C. P507,233.24
D. P519,327.95
Answer: Option D
301. 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%
Answer: Option C
302. 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
Answer: Option D
303. 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%
Answer: Option C
304. 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%
Answer: Option C
305. Compute the equivalent compound amount factor if it is compounded continuously.
A. 1.61607
B. 1.24532
C. 1.24282
D. 0.24245
Answer: Option A
306. Compute the equivalent present worth factor if it is compounded continuously.
A. 1.249347
B. 1.243248
C. 1.214359
D. 0.616783
Answer: Option D
307. 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
Answer: Option C
308. 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
Answer: Option C
309. A man loan P2000 from the bank. How long would it take in years if it was made at 8% compounded continuously.
A. 7.18 years
B. 5.18 years
C. 8.18 years
D. 6.18 years
Answer: Option D
310. 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.
A. 11% ; 12.623% ; 11.42%
B. 12% ; 11.06% ; 12.724%
C. 12% ; 12.616% ; 12.06%
D. 11% ; 11.664% ; 11.93%
Answer: Option C
311. How long would it take your money to double itself if it is invested at 6% simple interest, compounded semi-quarterly, and
compounded continuously?
A. 12.67 yrs ; 11.2 yrs ; 15.05 yrs
B. 18.67 yrs ; 11.6 yrs ; 11.24 yrs
C. 16.67 yrs ; 11.6 yrs ; 11.55 yrs
D. 17.67 yrs ; 10.2 yrs ; 11.45 yrs
Answer: Option C
For problems 312 – 314:
An amount of P50,000 was invested for 3 years.
312. Compute its interest at the end of 3 years if it is invested at 10% simple interest.
A. P16,550.00
B. P15,000.00
C. P17,492.94
D. P14,242.15
Answer: Option B
313. Compute for its compound interest if it is invested at 10% compounded annually.
A. P16,550.00
B. P15,000.00
C. P17,492.94
D. P14,242.15
Answer: Option A
314. Compute its interest if it is invested at 10% compounded continuously.
A. P16,550.00
B. P15,000.00
C. P17,492.94
D. P14,242.15
Answer: Option C
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.
315. What is the nominal rate of interest if it is compounded quarterly?
A. 8.00%
B. 7.00%
C. 8.24%
D. 7.96%
Answer: Option A
316. What is the actual rate of interest?
A. 8.00%
B. 7.00%
C. 8.24%
D. 7.96%
Answer: Option C
317. What is the equivalent nominal rate if it is compounded semi-quarterly?
A. 8.00%
B. 7.00%
C. 8.24%
D. 7.96%
Answer: Option D
318. What is the value of (F/P, 8%, 6) if it is compounded semi-quarterly.
A. 0.524273541
B. 1.487886717
C. 0.787566127
D. 1.612226000
Answer: Option D
319. What is the value of (P/F, 6%, 4) if it is compounded bi-monthly.
A. 0.524273541
B. 1.487886717
C. 0.787566127
D. 1.612226000
Answer: Option C
320. What is the single payment compound amount factor for 8% compounded bi-monthly for 5 years.
A. 0.524273541
B. 1.487886717
C. 0.787566127
D. 1.612226000
Answer: Option B
For Problems 321 – 323:
If money is invested at a nominal rate of interest of 8% for a period of 4 years.
321.) What is the effective rate if it is compounded continuously?
A. 8.33%
B. 9.33%
C. 8.93%
D. 9.93%
Answer: Option A
322.) What is the value of the compound amount factor if it is compounded continuously?
A. 1.377128
B. 1.424231
C. 0.214212
D. 0.122416
Answer: Option A
323. What is the value of the present worth factor if it is compounded continuously?
A. 1. 272441
B. 0.272441
C. 1.726419
D. 0.726149
Answer: Option D
324. If the single payment amount factor for a period of 5 years is 1.33822, what is the nominal rate of interest?
A. 6.00%
B. 7.00%
C. 6.92%
D. 7.92%
Answer: Option A
325. What is the effective rate of interest if it is compounded semi-annually of problem no. 324?
A. 5.00%
B. 7.24%
C. 6.92%
D. 6.09%
Answer: Option D
326. What is the equivalent nominal rate if it is compounded quarterly of problem no. 324?
A. 6.12%
B. 4.24%
C. 5.43%
D. 5.87%
Answer: Option D
327. Money was invested at x% compounded quarterly. If it takes money to quadruple in 17.5 years, find the value of x.
A. 6.23%
B. 8.00%
C. 5.92%
D. 9.78%
Answer: Option B
328.) What is the actual interest rate of problem no. 327?
A. 7.24%
B. 7.92%
C. 8.24%
D. 8.87%
Answer: Option C
329.) What is the equivalent rate if problem no. 327 is compounded daily?
A. 7.24%
B. 7.92%
C. 8.24%
D. 8.87%
Answer: Option B
For Problems 330 – 332:
A businessman loaned P500,000 from a local bank that charges an interest rate of 12%.
330. How much is he going to pay at the end of 5 years if it was made at 12% simple interest?
A. P800,000.00
B. P911,059.20
C. P823,243.09
D. P907,009.21
Answer: Option A
331. How much is he going to pay at the end of 5 years if it was made at 12% compound semi-quarterly?
A. P800,000.00
B. P911,059.20
C. P823,243.09
D. P907,009.21
Answer: Option D
332. How much is he going to pay at the end of 5 years if it was made at 12% compound continuously?
A. P800,000.00
B. P911,059.20
C. P823,243.09
D. P907,009.21
Answer: Option B
333. 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?
A. P43,214.24
B. P44,086.60
C. P43.242.24
D. P44,215.60
Answer: Option B
334. 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?
A. 4.56 years
B. 3.45 years
C. 4.23 years
D. 3.64 years
Answer: Option A
335. 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?
A. 9.5%
B. 6.35%
C. 8.21%
D. 7.12%
Answer: Option A
336. Which of these gives the lowest effective rate of interest?
A. 12.35% compounded annually
B. 12.2% compounded quarterly
C. 11.9% compounded semi-annually
D. 11.6% compounded monthly
Answer: Option D
337. It takes 20.15 years to quadruple your money if it is invested at x% compounded semi-annually. Find the value of x.
A. 8%
B. 7%
C. 6%
D. 5%
Answer: Option B
338. It takes 13.87 years to treble the money at the rate of x% compounded quarterly. Compute the value of x.
A. 5%
B. 7%
C. 6%
D. 8%
Answer: Option D
339. Money was invested at x% compounded quarterly. If it takes the money into quadruple in 17.5 years, find the value of x.
A. 8%
B. 7%
C. 6%
D. 5%
Answer: Option A
340. 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?
A. 4.9%
B. 5.0%
C. 5.8%
D. 3.8%
Answer: Option C
341. 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.
A. pay P155 more if you borrowed from the bank
B. save P55 by borrowing from your friend
C. pay P85 more if you borrowed from the bank
D. save P95 by borrowing from your friend
Answer: Option B
342. Find the present worth of a future payment of P1000,000 to be made in 10 years with an interest of 12% compounded
quarterly.
A. P30,444.44
B. P30,655.68
C. P33,000.00
D. P30,546.01
Answer: Option B
343. 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?
A. P95,324.95
B. P68743.24
C. P82938.28
D. P56244.75
Answer: Option C
344. The effective rate of interest of 14% compounded semi-annually is:
A. 14.49%
B. 14.94%
C. 14.36%
D. 14.88%
Answer: Option A
345. 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.
A. P71,781.47
B. P70,374.90
C. P72,475.23
D. P78,536.34
Answer: Option A
346. What is the effective rate corresponding to 18% compounded daily? Take 1 year is equal to 360 days.
A. 18.35%
B. 18.10%
C. 19.39%
D. 19.72%
Answer: Option D
347. 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.
A. 3.00% and 3.02%
B. 2.30% and 2.76%
C. 4.29% and 4.32%
D. 3.97% and 3.95%
Answer: Option A
348. Convert 12% semi-annually to compounded quarterly.
A. 19.23%
B. 14.67%
C. 23.56%
D. 11.83%
Answer: Option D
349. What is the corresponding effective interest rate of 18% compounded semi-quarterly?
A. 19.25%
B. 18.46%
C. 19.48%
D. 18.95%
Answer: Option C
350.) If P5000 shall accumulate for 10 years at 8% compounded quarterly, find the compounded interest at the end of 10 years.
A. P6,005.30
B. P6,040.20
C. P6,000.00
D. P6,010.20
Answer: Option B
351. 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?
A. P14,842.40
B. P12,316.40
C. P16,712.03
D. P15,382.60
Answer: Option C
352. How long (in years) will it take the money to quadruple if it earns 7% compounded semi-annually?
A. 26.30 years
B. 33.15 years
C. 40.30 years
D. 20.15 years
Answer: Option D
353. 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?
A. P421,170
B. P401,170
C. P521,170
D. P621,170
Answer: Option D
354. If P500,000 is deposited at a rate of 11.25% compounded monthly, determine the compounded interest after 7 years and 9
months.
A. P690,849
B. P680,686
C. P670,258
D. P660,592
Answer: Option A
355. 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. 3 years
D. 6 years
Answer: Option B
356. A bank is advertising 9.5% accounts that yields 9.84% annually. How often is the interest compounded?
A. monthly
B. quarterly
C. bi-monthly
D. daily
Answer: Option B
357. 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.
A. P120,289.51
B. P110,297.27
C. P129,382.38
D. P122,265.69
Answer: Option A
358. 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 at maturity?
A. P15,386.00
B. P13,382.00
C. P15,030.00
D. P16,653.00
Answer: Option C
359. 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?

A. P15,030.00
B. P12,382.00
C. P18,548.39
D. P15,386.00
Answer: Option C
360. If the inflation rate is 6%, cost of money is 10%, what interest rate will take care of inflation and the cost of money?
A. 16.6%
B. 17.7%
C. 15.5%
D. 14.4%
Answer: Option A
361. 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?

A. 2.94%
B. 4.25%
C. 3.16%
D. 5.16%
Answer: Option A
362.) 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%?
A. 6%
B. 7%
C. 5%
D. 4%
Answer: Option A
363. 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?
A. 6.62%
B. 7.67%
C. 5.66%
D. 4.64%
Answer: Option C
364. An engineer bought an equipment for P500,000. Other expenses including installations amounted to P30,000. At the end of its estimated useful life of 10 years, the
salvage value will be 10% of the first cost. Using straight line method of depreciation, what is the book value after 5 years?

A. P291,500
B. P242,241
C. P282,242
D. P214,242
Answer: Option A
365. A small machine costing P80,000 has a salvage value of x at the end of its life of 5 years. The book value at the end of the 4th
year is P22,400. What is the value of x using the straight line method depreciation?
A. P6000
B. P8000
C. P7000
D. P9000
Answer: Option B
366. A machine has a salvage value of P12,000 at the end of its useful life of 6 years. The book value at the end of 5 years is
P30,833.33. Using a straight line method of depreciation, what is the first cost of the machine?
A. P125,500
B. P125,000
C. P135,500
D. P135,000
Answer: Option B
367. A manufacturing plant was built at a cost of P5M and is estimated to have a life of 20 years with a salvage value of P1M. A certain equipment worth P570,000 was
installed at a cost of P80,000 is expected to operate economically for 15 years with a salvage value of P50,000. Determine the book value of the plant and equipment
after 10 years, use straight line depreciation method.

A. P3,250,000
B. P4,250,000
C. P3,750,000
D. P4,500,000
Answer: Option A
368. A printing equipment costs P73,500 has a life expectancy of 8 years and has a salvage value of P3,500 at the end of its life.
The book value at the end of x years is equal to P38,500. Using straight line method of depreciation, solve for the value of x.
A. 5 years
B. 6 years
C. 4 years
D. 3 years
Answer: Option C
369. The cost of the printing equipment is P500,000 and the cost of handling and installation is P30,000. If the book value of the equipment at the end of the 3rd year is
P242,000 and the life of the equipment is assumed to be 5 years, determine the salvage value of this equipment at the end of 5 years.

A. P50,000
B. P53,000
C. P60,000
D. P64,000
Answer: Option A
370. An engineer bought an equipment for P500,000. He spent an additional amount of P30,000 for installation and other expenses. The salvage value is 10% of the first
cost. If the book value at the end of 5 years will be P291,500 using straight line method of depreciation, compute the useful life of the equipment in years.

A. 10 years
B. 6 years
C. 8 years
D. 15 years
Answer: Option A
371. The cost of equipment is P500,000 and the cost of installation is P30,000. If the salvage value is 10% of the cost of equipment
at the end of 5 years, determine the book value at the end of the fourth year. Use straight line method.
A. P155,000
B. P146,000
C. P140,000
D. P132,600
Answer: Option B
For Problems 172-174:
The first cost of a machine is P1,800,000 with a salvage value of P300,000 at the end of its life of 5 years. Determine the total
depreciation after 3 years.
372. Using Straight Line Method
A. P800,000
B. P900,000
C. P600,000
D. P700,000
Answer: Option B
373. Using Sum of Years Digit Method
A. P1,150,000
B. P1,300,000
C. P1,200,000
D. P1,350,600
Answer: Option C
374. Using Constant Percentage Method
A. P1,355,024.24
B. P1,246,422.53
C. P1,185,769.76
D. P1,432,624.84
Answer: Option C
375. An asset is purchased for P9,000.00. Its estimated economic life is 10 years after which it will be sold for P1,000.00. Find the
depreciation in the first three years using straight line method.
A. P2,500
B. P3,000
C. P2,400
D. P2,000
Answer: Option C
376. The purchase of a motor for P6000 and a generator for P4000 will allow the company to produce its own energy. The configuration can be assembled for P500. The
service will operate for 1600 hours per year for 10 years. The maintenance cost is P300 per year, and cost to operate is P0.85 per hour for fuel and related cost. Using
straight line depreciation, what is the annual cost for the operation? There is a P400 salvage value for the system at the end of 10 year.

A. P2,710
B. P2,630
C. P2,480
D. P2,670
Answer: Option D
377. A machine has an initial cost of P50,00.00 and a salvage value of P10,000.00 after 10 years. What is the straight line method
depreciation rate as a percentage of the initial cost?
A. 10%
B. 12%
C. 8%
D. 9%
Answer: Option C
378. A machine has an initial cost of P50,00.00 and a salvage value of P10,000.00 after 10 years. What is the book value after 5
years using straight line method depreciation rate?
A. P35,000
B. P15,500
C. P25,000
D. P30,000
Answer: Option D
379. A machine has a first of P80,000 and a salvage of P2,000 at the end of its life of 10 years. Find the book value at the end of the
6th year using straight line method of depreciation.
A. P33,200
B. P34,300
C. P35,400
D. P32,900
Answer: Option A
380. An asset is purchased for P90,000.00. Its estimated life is 10 years after which it will be sold for P1,000.00. Find the book value
during the first year if Sum of the Years Digits(SYD) depreciation is used.
A. P7,545.45
B. P5,245.92
C. P2,980.24
D. P6,259.98
Answer: Option A
381. A telephone company purchased a microwave radio equipment for P6M. Freight and installation charges amounted to 3% of the purchased price. If the equipment
shall be depreciated over a period of 8 years with a salvage value of 5%, determine the depreciation charge during the 5th year using the Sum of Year Digit Method.

A. P756,632.78
B. P652,333.33
C. P957,902.56
D. P845, 935.76
Answer: Option B
382. A consortium of international communications companies contracted for the purchase and installation of a fiber optic cable linking two major Asian cities at a total
cost of P960M. This amount includes freight and installation charges at 10% of the above total contract price. If the cable depreciated over a period of 15 years with zero
salvage value, what is the depreciation charge during the 8th year using the sum of year digits method?

A. P64 M
B. P80 M
C. P23 M
D. P76 M
Answer: Option A
383. A machine cost P7,350 has a life of 8 years and has a salvage value of P350 at the end of 8 years. Determine its book value at
the end of 4 years using sum years digit method.
A. P3,476.90
B. P6,543.21
C. P2,294.44
D. P5,455.01
Answer: Option C
384. A certain equipment costs P7,000 has an economic life of n years and a salvage value P350 at the end of n years. If the book value at the end of 4 years is equal to
P2197.22, compute for the economic life of the equipment using the sum of years digit method.

A. 10 years
B. 8 years
C. 16 years
D. 11 years
Answer: Option B
385. A company purchased an asset for P10000 and plans to keep it for 20 years. If the salvage value is zero at the end of the 20th
year, what is the depreciation in the third year? Use sum of years digit method.
A. P1000
B. P938
C. P857
D. P747
Answer: Option C
386. An equipment costs P7000 and has a life of 8 years and salvage value of x after 8 years. If the book value of the equipment at
the 4th year is equal to P2197.22, compute the salvage value x using the sum of years digit method.
A. P594
B. P350
C. P430
D. P290
Answer: Option B
387. ABC Corporation makes it policy that for every new equipment purchased, the annual depreciation should not exceed 20% of
the first cost at any time without salvage value. Determine the length of service if the depreciation used is the SYD Method.
A. 9 years
B. 12 years
C. 10 years
D. 19 years
Answer: Option D
388. A machine having a certain first cost has a life of 10 years and a salvage value of 6.633% of the first cost at the end of 10 years. If it has a book value of P58,914 at
the end of the 6thyear, how much is the first cost of the machine if the constant percentage of declining value is used in the computation for its depreciation. (Matheson’s
Method)
A. P600,000
B. P100,000
C. P300,000
D. P900,000
Answer: Option C
389. A machine costing P720,000 is estimated to have a life of 10 years. If the annual rate of depreciation is 25%, determine the
total depreciation using a constant percentage of the declining balance method.
A. P679,454.27
B. P532,825.73
C. P432,725.45
D. P764,243.33
Answer: Option A
390. An earth moving equipment that cost P90,000 will have an estimated salvage value of P18,000 at the end of 8 years. Using
double-declining balance method, compute the book value and the total depreciation at the end of the 5th year.
A. P21,357.42 ; P68,642.58
B. P24,362.48 ; P65,637.52
C. P15,830.34 ; P74,169.66
D. P19,442.78 ; P70,557.22
Answer: Option A
391. A certain office equipment has a first cost of P20,000 and has a salvage value of P1,000 at the end of 10 years. Determine the
depreciation at the end of the 6th year using Sinking fund method at 3% interest.
A. P10,720
B. P11,680
C. P12,420
D. P9,840
Answer: Option C
392. An equipment which cost P200,000 has a useful life of 8 years with a salvage value of P25,000 at the end of its useful life. If
the depreciation at the first year is P21,875, what method is used in the calculation of depreciation?
A. Straight Line
B. Declining Balance
C. Sinking Fund
D. Sum of Years Digit
Answer: Option A
393. An equipment costs P8,000 has an economic life of 8 years and salvage value of P400 at the end of 8 years. The first year
depreciation amounts to P1,688.89. What method is used in the calculation of the depreciation?
A. Straight Line
B. Declining Balance
C. Sinking Fund
D. Sum of Years Digit
Answer: Option D
394. The original cost of a certain machine is P150,000 and has an economic life of 8 years with a salvage value of P9,000 at that
time. If the depreciation of the first year is equal to P44,475, what method is used in the calculation of the depreciation?
A. Straight Line
B. Declining Balance
C. Sinking Fund
D. Sum of Years Digit
Answer: Option B
395. A machine has a first cost of P140,000 and a life of 8 years with a salvage value of P10,000 at the end of its useful life. If the
depreciation at the first year amounts to P35,000, what method is used in the calculation of depreciation?
A. Double Declining Balance
B. Straight Line
C. Declining Balance
D. Sum of Years Digit
Answer: Option A
396. A hydraulic machine cost P180,000 and has a salvage value of P15,000 at the end of its useful life which is 12 years. If the
depreciation at the first year is P9,780.71, what method is used in computing the depreciation. Assume money is worth 6% annually.
A. Straight Line
B. Declining Balance
C. Sinking Fund
D. Sum of Years Digit
Answer: Option C
397. An equipment costs P480,000 and has a salvage value of 10% of its cost at the end of its economic life of 35,000 operating
hours. In the first year, it was used for 4,000 hours. Determine its book value at the end of the first year.
A. P430,629.00
B. P418,360.00
C. P380,420.00
D. P376,420.00
Answer: Option A
398. An equipment costs P480,000 and has a salvage value of 10% of its cost at the end of its economic life of 36,000 operating hours in a period of 5 years. In the first
year of service, it was used for 12,000 hours. If at the end of the 2nd year it was used for 15,000 hours, find the depreciation at the second year.

A. P180,000
B. P190,000
C. P160,000
D. P150,000
Answer: Option A
399. A certain machine cost P40,000 and has a life of 4 years and a salvage value of P5000. The production output of this machine in units per year is 1000 units for the
first year, 2000 units for the second year, 3000 units for the third year, and 4000 units for the fourth year. If the units produced are in uniform quality, what is the
depreciation charge at the end of the fourth year.
A. P14,000
B. P15,000
C. P13,000
D. P16,000
Answer: Option A
400. A lathe machine costs P300,000 brand new with a salvage value of x pesos. The machine is expected to last for 28500 hours in a period of 5 years. In the first year
of service it was used for 8000 hours. If the book value at the end of the first year is P220,000, compute for the salvage value x in pesos.

A. P15,000
B. P12,000
C. P18,000
D. P20,000
Answer: Option A
01. It is defined to be the capacity of a commodity to satisfy human want
A. Necessity
B. Utility
C. Luxuries
D. Discount
Answer: Option B
402. It is the stock that has prior to dividends. It usually does not bring voting right to the owners and the dividend is fixed and
cannot be higher than the specified amount.
A. Common stock
B. Voting stock
C. Pretend stock
D. Non par value stock
Answer: Option C
403. It is an amount which a willing buyer will pay to a willing seller for the property where each has equal advantage and is under
no compulsion to buy or sell.
A. Book value
B. Market value
C. Use value
D. Fair value
Answer: Option B
404.           is the loss of value of the equipment with use over a period of time. It could mean a difference in value between a new
asset and the use asset currently in a service.
A. Loss
B. Depreciation
C. Extracted
D. Gain
Answer: Option B
405. An economic condition in which there are so few suppliers of a particular product that one supplier’s actions significantly affect
prices and supply.
A. Oligopoly
B. Monopsony
C. Monopoly
D. Perfect competition
Answer: Option A
406. A market whereby there is only one buyer of an item for when there are no goods substitute.
A. Monopsony
B. Monopoly
C. Oligopoly
D. Oligopsony
Answer: Option A
407. 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
Answer: Option C
408. Reduction in the level of nation income and output usually accompanied by a fall in the general price level.
A. Devaluation
B. Deflation
C. Inflation
D. Depreciation
Answer: Option B
409. A formal organization of producers within industry forming a perfect collusion purposely formed to increase profit and block new
comers from the industry.
A. Cartel
B. Monopoly
C. Corporation
D. Competitors
Answer: Option A
410. A market situation where there is only one seller with many buyer.
A. Monopoly
B. Monophony
C. Oligopoly
D. Perfect competition
Answer: Option A
411. A market situation where there is one seller and buyer.
A. Bilateral monopoly
B. Monopoly
C. Oligopoly
D. Bilateral Monopoly
Answer: Option A
412. Reduction in the level of national income and output usually accompanied by a fall in the general price level.
A. Deflation
B. Inflation
C. Devaluation
D. Depreciation
Answer: Option A
413. A series of equal payments made at equal interval of time.
A. Annuity
B. Amortization
C. Depreciation
D. Bonds
Answer: Option A
414. The money paid for the use of borrowed capital.
A. Interest
B. Amortization
C. Annuity
D. Bonds
Answer: Option A
415. The place where buyers and sellers come together.
A. Maker
B. Store
C. Bargain center
D. Port
416. The value of the stock as stated on the stocks certificate
A. Stock value
B. Par value
C. Interest
D. Maturity value
Answer: Option B
417. A market situation in which two competing buyers exert controlling influence over many sellers.
A. Bilateral monopoly
B. Oligopoly
C. Duopsony
D. Duopoly
Answer: Option C
418. A market situation in which two powerful groups or organizations dominate commerce in one business market or commodity.
A. Oligopoly
B. Duopoly
C. Duopsony
D. duopoly
Answer: Option B
419. The type of annuity where the first payment is made after several periods, after the beginning of the payment.
A. Perpetuity
B. Ordinary annuity
C. Annuity due
D. Deferred annuity
Answer: Option D
420. The condition in which the total income equals the total operating expenses.
A. Tally
B. Par value
C. Check and balance
D. Break even
Answer: Option D
421. The amount which has been spent or capital invested which for some reasons cannot be retrieved.
A. Sunk cost
B. Fixed costs
C. Depletion cost
D. Construction cost
Answer: Option A
422. An obligation with no condition attach is called
A. Personal
B. Gratuitous
C. Concealed
D. Private
Answer: Option B
423. The sum of all the costs necessary to prepare a construction project for operation.
A. Operation costs
B. Construction cost
C. Depletion cost
D. Production cost
Answer: Option B
424. The amount received from the sale of an addition unit of a product.
A. Marginal cost
B. Marginal revenue
C. Extra profit
D. Prime cost
Answer: Option B
425. The amount that the property would give if sold for junk.
A. Junk value
B. Salvage value
C. Scrap value
D. Book value
Answer: Option C
426. The worth of the property which is equal to the original cost less the amount which has been charged to depreciation.
A. Scrap value
B. Salvage value
C. Book value
D. Market value
Answer: Option C
427. The sum of the direct labor cost incurred in the factory and the direct material cost of all materials that go into production is
called
A. Net cost
B. Maintenance cost
C. Prime cost
D. Operating cost
Answer: Option C
428. The difference between the present value and the worth of money at some time in the future is called
A. Market value
B. Net value
C. Discount
D. Interest
Answer: Option C
429. The addition cost of producing one more unit is
A. Prime cost
B. Marginal cost
C. Differential cost
D. Sunk cost
Answer: Option B
430. A written contract by a debtor to pay final redemption value on an indicated date or maturity date and pay a certain sum
periodically.
A. Annuity
B. Bond
C. Amortization
D. Collateral
Answer: Option B
431. Estimated value of the property at the useful life.
A. Market value
B. Fair value
C. Salvage value
D. Book value
Answer: Option C
432. Determination of the actual quantity of the materials on hand as of a given date.
A. Physical inventory
B. Counting principle
C. Stock assessment
D. Periodic material update
Answer: Option A
433. This consists of a cash and account receivable during the next period or any other material which will be sold.
A. Fixed assets
B. Deferred charges
C. Current asset
D. Liability
Answer: Option C
434. A wrong act that causes injury to a person or property and for which allows a claim by the injured party to recover damages.
A. Fraud
B. Tort
C. Libel
D. Scam
Answer: Option B
435. A series of uniform payment over an infinite period of time
A. Depletion
B. Capitalized cost
C. Perpetuity
D. Inflation
Answer: Option C
436. These are products or services that are required to support human life and activities that will be purchased in somewhat the
same quantity event though the price varies considerably.
A. Commodities
B. Necessities
C. Demands
D. Luxury
Answer: Option B
437. The quantity of a certain commodity that is offered for sale at a certain price at a given place and time.
A. Utility
B. Supply
C. Stocks
D. Goods
Answer: Option B
438. It is sometimes called the second hand value
A. Scrap value
B. Salvage value
C. Book value
D. Par value
Answer: Option B
439. Decreases in the value of a physical property due to the passage of time.
A. Deflation
B. Depletion
C. Declination
D. Depreciation
Answer: Option D
440. An association of two or more individuals for the purpose of engaging business for profit.
A. Single proprietorship
B. Party
C. Corporation
D. Partnership
Answer: Option D
441. The simplest form of business organization where in the business is own entirely by one person.
A. Partnership
B. Proprietorship
C. Corporation
D. Joint venture
Answer: Option B
442. Parties whose consent or signature in a contract is not considered intelligent.
A. Dummy person
B. Minors
C. Demented persons
D. Convict
Answer: Option C
443. It is defined as the capacity of a commodity to satisfy human want.
A. Satisfaction
B. Luxury
C. Necessity
D. Utility
Answer: Option B
444. This occurs in a situation where a commodity or service is supplied by a number of vendors and there is nothing to prevent
additional vendors entering the market.
A. Perfect competition
B. Monophony
C. Monopoly
D. Cartel
Answer: Option A
445. These are products or services that are desired by human and will be purchased if money is available after the required
necessities have been obtained.
A. Commodities
B. Necessities
C. Luxuries
D. Supplies
Answer: Option C
446. Grand total of the assets and operational capability of a corporation.
A. Authorized capital
B. Paid off capital
C. Subscribed capital
D. Investment
Answer: Option A
447. It is where the original record of a business transaction is recorded.
A. Ledger
B. Spreadsheet
C. Journal
D. Logbook
Answer: Option C
448. The length of time which the property may be operated at a profit.
A. Life span
B. Economic life
C. Operating life
D. Profitable life
Answer: Option B
449. The right and privilege granted to an individual or corporation to do business in a certain region.
A. Permit
B. Royalty
C. License
D. Franchise
Answer: Option D
450. The worth of an asset as shown in the accounting records of an enterprise.
A. Fair value
B. Par value
C. Market value
D. Book value
Answer: Option D
451. A bookstore purchased a best-selling book at P200.00 per copy. At what price should this book be sold so that by giving a 20%
discount, the profit is 30%.
A. P200.00
B. P300.00
C. P400.00
D. P500.00
Answer: Option C
452. 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 of 42%, what minimum rate of return, before payment of taxes, must the investment offer to be justified?
A. 13.02%
B. 12.07%
C. 10.89%
D. 11.08%
Answer: Option B
453. A manufacturing firm maintains one product assembly line to produce signal generators. Weekly demand for the generators is 35 units. The line operates for 7 hours
per day, 5 days per week. What is the maximum production time per unit in hours required of the line to meet the demand?

A. 1 hour
B. 1 hour and 10 minutes
C. 1 hour and 15 minutes
D. 1 hour and 30 minutes
Answer: Option A
454. Froyd Corporation’s gross margin is 45% of sales. Operating expenses such as sales and administration are 15% of sales.
Froyd Corporation is in 40% tax bracket. What percent of sales is their profit after taxes?
A. 21%
B. 20%
C. 19%
D. 18%
Answer: Option D
455. In determining the cost involved in fabricating sub-assembly B within a company, the following data have been gathered:
Direct material – P0.30 per unit
Direct labor – P0.50 per unit
Testing set-up – P300.00 per set-up
It is decided to subcontract the manufacturing of assembly B to an outside company. For an order of 100 units, what is the cost per
unit that is acceptable to the company?
A. P3.80
B. P4.00
C. P4.10
D. P4.20
Answer: Option A
456. By selling balut at P5 per dozen, a vendor gains 20%. The cost of the eggs rises by 12.5%. If he sells at the same price as
before, find his new gain in %.
A. 6.89%
B. 6.67%
C. 6.58%
D. 6.12%
Answer: Option C
457. An equipment installation job in the completion stage can be completed in 50 days of 8 hour/day work, with 50 men working. With the contract expiring in 40 days,
the mechanical engineer contractor decided to add 15 men on the job, overtime not being permitted.

If the liquidated damages is P5,000 per day of delay, and the men are paid P150 per day, how much money would he save with the
additional workers?
A. P43,450
B. P43,750
C. P44,250
D. P44,750
Answer: Option D
458. In a certain department store, the monthly salary of a saleslady is partly constant and partly varies as the value of her sales for the month. When the value of her
sales for the month is P10,000.00, her salary for the month is P900.00. When her monthly sales go up to P12,000.00, her monthly salary goes up to P1,000.00. What
must be the value of her sales so that her salary for the month will be P2,000.00?

A. P30,000
B. P31,000
C. P32,000
D. P33,000
Answer: Option C
459. Jojo bought a second-hand Betamax VCR and then sold it to Rudy at a profit of 40%. Rudy then sold the VCR to Noel at a
profit of 20%. If Noel paid P2,856 more than it costs Jojo, how much did Jojo pay for the unit?
A. P4,100
B. P3,900
C. P4,000
D. P4,200
Answer: Option D
460. The selling price of a TV set is double that of its net cost. If the TV set is sold to a customer at a profit of 25% of the net cost,
how much discount was given to the customer?
A. 37.5%
B. 37.9%
C. 38.2%
D. 38.5%
Answer: Option A
461. A Mechanical Engineer who was awarded a P450,000 contract to install the machineries of an oil mill failed to finish the work on time. As provided for in the
contract, he has to pay a daily penalty equivalent to one fourth of one per cent per day for the first 10 days and 0.5% per day for the next 10 days and one per cent per
day for everyday thereafter. If the total penalty was P60,750.00, how many days was the completion of the contract delayed?

A. 26 days
B. 27 days
C. 28 days
D. 29 days
Answer: Option A
462. The quarrying cost of marble and granite blocks plus delivery cost to the processing plant each is P2,400.00 per cubic meter.
Processing cost of marble into tile is P200.00 per square meter and that of the granite into tiles also is P600.00 per square meter.
If marble has a net yield of 40 square meters of tile per cubic meter of block and sells P400 per square meter, and granite gives a net yield of 50 square meters of tiles
per cubic meter of block and sells at P1000 per square meter. Considering all other costs to be the same, the granite is more profitable than the marble by how much?

A. P12,000 per cubic meter

B. P13,000 per cubic meter
C. P14,000 per cubic meter
D. P15,000 per cubic meter
Answer: Option A
463. A man would like to invest P50,000 in government bonds and stocks that will give an overall annual return of about 5%. The money to be invested in government
bonds will give an annual return of 4.5% and the stocks of about 6%. The investments are in units of P100.00 each. If he desires to keep his stock investment to
minimum in order to reduce his risk, determine how many stocks should be purchased.

A. 165
B. 166
C. 167
D. 168
Answer: Option B
464. A 220 V 2 hp motor has an efficiency of 80%. If power costs P3.00 per kw-hr for the first 50 kw-hr, 2.90 per kw-hr for the second 50 kw-hr, P2.80 for the third kw-
hr and so on until a minimum of P2.50 per kw-hr is reached. How much does it cost to run this motor continuously for 7 days?

A. P800
B. P820
C. P840
D. P860
Answer: Option D
465. An 8-meter concrete road pavement 500 meters long is desired to be constructed over a well-compacted gravel road, together with the necessary concrete curbs and
gutters on both sides. In order to put the subgrade on an even level grade, a 500 cubic meters of sand filling is necessary, over which the 10 inch concrete pavement will
be placed?
Assume the following data:
A. Sand fill, including rolling and watering = P100 per cubic meter
B. Concrete pavement, 10 in thick (labor and materials) including curing = P220 per sq. Meter
C. Curbs and gutters = P12 per linear meter
How much will the project cost allowing 15% for contingency?
A. P1,207,000
B. P1,207,500
C. P1,208,000
D. P1,208,500
Answer: Option B
466. An electric utility purchases 2,300,000 kw-hr per month of electric energy from National Power Corporation at P2.00 per kw-hr and sells all this to consumers after
deducting distribution losses of 20%. At what average rate per kw-hr should this energy be sold to break even if the following are other monthly expenses in its
operation:
Taxes 2.5 % of gross revenue Salaries P750,000
Depreciation P2,250,000 Interest P700,000 Maintenance P300,000
Miscellaneous P200,000 A. P4.90

B. P5.20
C. P5.90
D. P6.30
Answer: Option A
467. An engineer bidding on the asphalting of 7 km stretch of road is confronted with a problem of choosing between two possible
sites on which to set-up the asphalt-mixing machine.
Site A Site B
Average hauling distance 2.5 km 2.75 km Monthly rental P35,000 P6,500
Installing and dismantling of machine P20,000 P10,000

At Site A, it would be necessary to hire 2 flagmen at P150 per working day. The job can be completed in 32 weeks working 6 days a week. The project requires 16,670
cubic meter of asphalt mix per kilometre of road. If the asphalt mix is to be hauled by a contractor at P42 per cubic meter per km of haul. How much is site B more
expensive than site A?
A. P949,645
B. P962,101
C. P956,807
D. P974,090
Answer: Option A
468. A fixed capital investment of P10,000,000 is required for a proposed manufacturing plant and an estimated working capital of P2,000,000. Annual depreciation is
estimated to be 10% of the fixed capital investment. Determine the rate of return on the total investment if the annual profit is P2,500,000.

A. 28.33%
B. 29.34%
C. 30.12%
D. 30.78%
Answer: Option A
469. A call to bid was advertised in the Philippine Daily Inquirer for the construction of a transmission line from a mini-hydroelectric power plant to the substation which
is 5.035 kilometers away. The tanalised timber electrical posts must be placed at an interval of 50 m. The electrical posts must be 30 feet long, 8 inches in diameter at the
tip and 12 inches in diameter at the butt. The power house is 15 m from the first electric post and the substation is 20 m from the last electric post. Compute the estimated
cost for the project using the following data:

Cost of one tanalised timber post 30 feet long is P5,000 including delivery to the site. Labourer at P180 per day and 5 laborers can dig and erect 3 posts per day.
Electrician at P250 per day and 4 electricians can strung wires complete 150 meters per day. Electric wire cost P4.00 per meter. Use only 5 laborers and 4 electricians for
the project and is supervised by a foreman which is paid at P400 per day. Contingency is 10% and profit is 25%.

A. P745,890.23
B. P817,692.00
C. P789,120.80
D. P829,592.50
Answer: Option D
470. Upon the retirement after 44 years in government service, Mrs. Salud Araoarao was able to get a retirement lump sum of P2,300,000. As a hedge against inflation,
she decided to use a part of it invested in real state at Pagadian City and the remainder were invested as follows:

A. 30% in T-bills earning 12% interest

B. 35% in money market placement earning 14%
C. 35% in blue chip stock earning 13%
If her annual earnings from the T-bills, money market and stock is P50,000, How much did she invests in real estate?
A. P2,091,639.12
B. P1,916,858.24
C. P1,856,120.53
D. P1,790,274.78
Answer: Option B
 471. The monthly demand for ice cans being manufactured by Mr. Alarde is 3200 pieces. With a manual operated guillotine, the unit cuffing cost is P25.00. An
electrically operated hydraulic guillotine was offered to Mr. Alarde at a price of P275,000.00 and which cuts by 30% the unit cuffing cost. Disregarding the cost of
money, how many months will Mr. Alarde be able to recover the cost of the machine if he decides to buy now?

A. 10 months
B. 11 months
C. 12 months
D. 13 months
Answer: Option C
472. In a new gold mining area in Southern Leyte the ore contains on the average of ten ounces of gold per ton. Different methods
of processing are tabulated as follows:
Processing Method Cost per ton % Recovery
A P5,500 90
B P2,500 80
C P400 70
If gold can be sold at P4,000 per ounce, which method of processing yield the biggest return?
A. Processing method A
B. Processing method B
C. Processing method C
D. Either of the processing methods B or C
Answer: Option A
473. JRT Motors Inc. has been shipping its Suzuki engines in containers to avoid the necessary crating of the engines. JRT Motors Inc. will pay freight on container load
of 40 tons, regardless of whether or not the container is completely filled with engines. Record shows that due to engine size, JRT Motors Inc. has shipped only 30 tons
per container. Freight of container cost P3.00 per kilograms.

If the engines are crated so that they can be shipped at the rate of P3.50 per hundred kilograms with the freight bill computed only on the actual weight shipped. The cost
of crating would be P50 per engine and would increase the shipping weight from 1500 kg to 1520 kg per engine. How much more economical shipping the engine in
crates than in containers?
A. P670 per engine
B. P630 per engine
C. P650 per engine
D. P610 per engine
Answer: Option B
474. A paint manufacturing company uses a sand mill for fine grinding of paint with an output of 100 liters per hour using glass beads as grinding media. Media load in
the mill is 25 kg costing P200.00 per kg and is fully replenished in 2 months time at 8 hours per day operation, 25 days a month. A ceramic grinding media is offered to
this paint company, costing P400 per kg and needs 30 kg load in the sand mill, but guarantees an output of 120 liters per hour and full replenishment of media in 3
months. If profit on paint reduction is P15 per liter how much is a difference in profit between the two media?

A. P436,900
B. P462,000
C. P473,000
D. P498,200
Answer: Option C
475. 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%
Answer: Option C
476. 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%
Answer: Option C
477. 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?
A. P5,937.50
B. P5,873.20
C. P5,712.40
D. P5,690.12
Answer: Option A
478. 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.
A. P46,728.97
B. P47,098.12
C. P47,890.12
D. P48,090.21
Answer: Option A
479. 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.
A. 12.19%
B. 12.03%
C. 11.54%
D. 10.29%
Answer: Option D
480. 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?
A. P10,900
B. P11,200
C. P11,800
D. P12,000
Answer: Option C
481. 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.
A. 35.45%
B. 35.89%
C. 36.18%
D. 37.11%
Answer: Option D
482. 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?
A. 3.67%
B. 4.00%
C. 4.15%
D. 4.25%
Answer: Option B
483. 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?
A. 4.00%
B. 4.07%
C. 4.17%
D. 4.25%
Answer: Option C
484. 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?
A. P25,168
B. P25,175
C. P25,189
D. P25,250
Answer: Option D
485. 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
Answer: Option A
486. 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%
Answer: Option B
487. 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%
Answer: Option B
488. 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
Answer: Option D
489. 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%
Answer: Option A
490. 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%
Answer: Option A
491. P4,000 is borrowed for 75 days at 16% per annum simple interest. How much will be due at the end of 75 days?
A. P4,033.33
B. P4,333.33
C. P4,133.33
D. P4,666.67
Answer: Option C
492. 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
Answer: Option A
493. 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
Answer: Option C
494. 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?
A. 13.05%
B. 13.22%
C. 13.46%
D. 13.64%
Answer: Option D
495. 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.
A. 15.92%
B. 15.75%
C. 15.45%
D. 15.08%
Answer: Option A
496. 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 or often referred to as the “banker’s discount.”
A. 13.15%
B. 13.32%
C. 13.46%
D. 13.73%
Answer: Option D
497. 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?
A. P1,124.67
B. P1,233.55
C. P1,289.08
D. P1,302.67
Answer: Option B
498. 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%
Answer: Option B
499. 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%.
A. P664.23
B. P664.89
C. P665.21
D. P666.39
Answer: Option D
500. 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%
Answer: Option A
501. On her recent birthday, April 22, 2001, Nicole was given by her mother a certain sum of money as birthday present. She decided to invest the said amount on 20%
exact simple interest. If the account will mature on Christmas day at an amount of P10,000.00, how much did Nicole receive from her mother on her birthday?

A. P8,807.92
B. P8,827.56
C. P8,832.17
D. P8,845.78
Answer: Option A
502. What is the ordinary interest on P1,500.50 for 182 days at 5.2%?
A. P39.01
B. P39.45
C. P39.82
D. P39.99
Answer: Option B
503. Nicole has P20,400 in cash. She invested it at 7% from March 1, 2006 to November 1, 2006 at 7% interest. How much is the
interest using the Banker’s Rule?
A. P972.12
B. P970.78
C. P973.12
D. P971.83
Answer: Option D
504. The amount of P20,000 was deposited in a bank earning an interest of 6.5% per annum. Determine the total amount at the end
of 7 years if the principal and interest were not withdrawn during this period?
A. P30,890.22
B. P30,980.22
C. P31,079.73
D. P31,179.37
Answer: Option C
505. A loan for P50,000 is to be paid in 3 years at the amount of P65,000. What is the effective rate of money?
A. 9.01%
B. 9.14%
C. 9.31%
D. 9.41%
Answer: Option B
506. The amount of P50,000 was deposited in the bank earning an interest of 7.5% per annum. Determine the total amount at the
end of 5 years, if the principal and interest were not withdrawn during the period.
A. P71,781.47
B. P71,187.47
C. P71,817.47
D. P71,718.47
Answer: Option A
507. Find the present worth of a future payment of P80,000 to be made in six years with an interest of 12% compounded annually.
A. P40,540.49
B. P40,450.49
C. P40,350.49
D. P40,530.49
Answer: Option D
508. What is the effective rate corresponding to 18% compounded daily? Take 1 year is equal to 360 days.
A. 19.61%
B. 19.44%
C. 19.31%
D. 19.72%
Answer: Option D
509. What nominal rate, compounded semi-annually, yields the same amount as 16% compounded quarterly?
A. 16.09%
B. 16.32%
C. 16.45%
D. 16.78%
Answer: Option B
510. What rate of interest compounded annually is the same as the rate of interest of 8% compounded quarterly?
A. 8.07%
B. 8.12%
C. 8.16%
D. 8.24%
Answer: Option D
511. Find the nominal rate, which if converted quarterly could be used instead of 12% compounded semi-annually.
A. 11.83%
B. 11.09%
C. 11.65%
D. 11.25%
Answer: Option A
512. Which of these gives the lowest effective rate of interest?
A. 12.35% compounded annually
B. 11.90% compounded semi-annually
C. 12.20% compounded quarterly
D. 11.60% compounded monthly
Answer: Option D
513. Find the compound amount if P2,500 is invested at 8% compounded quarterly for 5 years and 6 months.
A. P3,864.95
B. P3,846.59
C. P3,889.95
D. P3,844.95
Answer: Option A
514. An amount of P1,000 becomes P1,608.44 after 4 years compounded bimonthly. Find the nominal interest.
A. 11.89%
B. 12.00%
C. 12.08%
D. 12.32%
Answer: Option B
515. If P5,000 shall accumulate for 10 years at 8% compounded quarterly, then what is the compound interest at the end of 10
years?
A. P6,080.40
B. P6,020.40
C. P6,040.20
D. P6,060.20
Answer: Option C
516. What is the corresponding effective rate of 18% compounded semi-quarterly?
A. 19.24%
B. 19.48%
C. 19.84%
D. 19.92%
Answer: Option B
517. Find the present worth of a future payment of P100,000 to be made in 10 years with an interest of 12% compounded quarterly.
A. P30,555.68
B. P30,656.86
C. P30,556.86
D. P30,655.68
Answer: Option D
518. In how many years is required for P2,000 to increase by P3,000 if interest at 12% compounded semi-annually?
A. 7.86 years
B. 7.65 years
C. 7.23 years
D. 8.12 years
Answer: Option A
519. The amount of P150,000 was deposited in the bank earning an interest of 7.5% per annum. Determine the total amount at the
end of 5 years, if the principal and interest were not withdrawn during the period.
A. P215,344.40
B. P213,544.40
C. P234,153.40
D. P255.443.10
Answer: Option A
520. How long will it take money to double itself if invested at 5% compounded annually?
A. 13.7 years
B. 14.2 years
C. 14.7 years
D. 15.3 years
Answer: Option B
521. What is the corresponding effective interest rate of 18% compounded semi-monthly?
A. 19.35%
B. 19.84%
C. 19.48%
D. 19.64%
Answer: Option D
522. What is the effective rate of 14% compounded semi-annually?
A. 14.49%
B. 14.59%
C. 14.69%
D. 14.79%
Answer: Option A
523. At an interest rate of 10% compounded annually, how much will a deposit of P1,500 be in 15 years?
A. P6,265.87
B. P6,256.78
C. P6,526.87
D. P6,652.78
Answer: Option A
524. A man expects to receive P25,000 in 8 years. How much is that money worth now considering interest at 8% compounded
quarterly?
A. P13,256.83
B. P13,655.28
C. P13,625.83
D. P13,265.83
Answer: Option D
525. About how many years will P100,000 earn a compound interest of P50,000 if the interest rate is 9% compounded quarterly?
A. 4 years
B. 5 years
C. 6 years
D. 7 years
Answer: Option B
526. Compute the equivalent rate of 6% compounded semi-annually to a rate compounded quarterly.
A. 5.12%
B. 5.96%
C. 5.78%
D. 6.12%
Answer: Option B
527. What is the amount of P12,800 in 4 years at 5% compounded quarterly?
A. P15,461.59
B. P15,146.95
C. P15,641.59
D. P15,614.59
Answer: Option D
528. By the condition of a will, the sum of P20,000 is left to a girl to be held in trust fund by her guardian until it amounts to P50,000.
When will the girl receive the money if the fund is invested at 8% compounded quarterly?
A. 11.23 years
B. 11.46 years
C. 11.57 years
D. 11.87 years
Answer: Option C
529. If P50,000 shall accumulate for 10 years at 4% compounded quarterly, find the compounded interest at the end of 10 years.
A. P2,333.32
B. P2,444.32
C. P2,555.32
D. P2,666.32
Answer: Option B
530. A sum of P1,000 is invested now and left for eight years, at which time the principal is withdrawn. The interest has accrued is
left for another eight years. If the effective annual interest rate is 5%, what will be the withdrawal amount at the end of the 16th year.
A. P693.12
B. P700.12
C. P702.15
D. P705.42
Answer: Option D
531. P1,500.00 was deposited in a bank account, 20 years ago. Today, it is worth P3,000.00. Interest is paid semi-annually.
Determine the interest rate paid on this account.
A. 2.9%
B. 3.0%
C. 3.2%
D. 3.5%
Answer: Option D
532. A merchant puts in his P2,000.00 to a small business for a period of six years. With a given interest rate on the investment of
15% per year, compounded annually, how much will he collect at the end of the sixth year?
A. P4,626.12
B. P4,262.12
C. P4,383.12
D. P4,444.12
Answer: Option A
533. A man borrowed P100,000 at the interest rate of 12% per annum, compounded quarterly. What is the effective rate?
A. 12.75%
B. 12.55%
C. 12.45%
D. 12.35%
Answer: Option B
534. Mandarin Bank advertises 9.5% account that yields 9.84% annually. Find how often the interest is compounded.
A. Monthly
B. Bimonthly
C. Quarterly
D. Annually
Answer: Option C
535. When will an amount be tripled with an interest of 11.56%?
A. 9 years
B. 10 years
C. 11 years
D. 12 years
Answer: Option B
536. A student plans to deposit P1,500.00 in the bank now and another P3,000.00 for the next 2 years. If he plans to withdraw P5,000.00 three years from after his last
deposit for the purpose of buying shoes, what will be the amount of money left in the bank after one year of his withdrawal? Effective annual interest rate is 10%.

A. P1,549.64
B. P1,459.64
C. P1,345.98
D. P1,945.64
Answer: Option A
537. How much must be invested on January 1, 1998 in order to accumulate P2,000 on January 1, 2003? Money is worth 6%.
A. P1,509.34
B. P1,249.64
C. P1,378.98
D. P1,494.52
Answer: Option D
538. A nominal interest of 3% compounded continuously is given on the account. What is the accumulated amount of P10,000 after
10 years?
A. P13,498.59
B. P13,489.59
C. P13,789.98
D. P13,494.52
Answer: Option A
539. A mechanical engineer wishes to accumulate a total of P10,000 in a savings account at the end of 10 years. If the bank pays
only 4% compounded quarterly, what should be the initial deposit?
A. P6,176.35
B. P6,761.35
C. P6,716.53
D. P6,167.35
Answer: Option C
540. Funds are deposited in a savings account at an interest of 8% per annum. What is the initial amount that must be deposited to
yield a total of P10,000 in 10 years?
A. P4,196.30
B. P4,721.39
C. P4,796.03
D. P4,631.93
Answer: Option D
541. If P500,000 is deposited at a rate of 11.25% compounded monthly, determine the compounded interest after 7 years and 9
months.
A. P690,848.73
B. P670,651.23
C. P680,649.56
D. P685,781.25
Answer: Option A
542. An interest rate is quoted as being 7.5% compounded quarterly. What is the effective annual interest rate?
A. 7.91%
B. 7.51%
C. 7.71%
D. 7.31%
Answer: Option C
543. You borrow P3,500.00 for one year from a friend at an interest rate of 1.5% per month instead of taking a loan from a bank at a
rate of 18% per year. How much lesser you will pay by borrowing the money from the bank?
A. P53.89
B. P54.66
C. P53.78
D. P54.98
Answer: Option B
544. A deposit of P1,000 is made in a bank account that pays 8% interest compounded annually. Approximately how much money
will be in the account after 10 years?
A. P2,187.39
B. P2,145.78
C. P2,176.45
D. P2,158.92
Answer: Option D
545. Fifteen years ago P1,000.00 was deposited in a bank account, and today it is worth P2,370.00. The bank pays interest
semi-annually. What was the interest rate paid in this account?
A. 5.72%
B. 5.78%
C. 5.84%
D. 5.90%
Answer: Option C
546. P200,000 was deposited on January 1, 1988 at an interest rate of 24% compounded semi-annually. How much would the sum
be on January 1, 1993?
A. P631,627.78
B. P612,890.76
C. P621,169.64
D. P611,672.18
Answer: Option C
547. What is the present worth of two P100 payments at the end of the third year and fourth year? The annual interest rate is 8%.
A. P150.56
B. P152.88
C. P153.89
D. P151.09
Answer: Option B
548. Consider a deposit of P600.00 to be paid back in one year by P700.00. What is the rate of interest, i% per year compounded
annually such that the net present worth of the investment is positive? Assume i ≥ 0.
A. 16.50%
B. 16.75%
C. 16.33%
D. 16.67%
Answer: Option D
549. A firm borrows P2,000 for 6 years at 8 %. At the end of 6 years, it renews the loan for the amount due plus P2,000 more for 2
years at 8%. What is the lump sum due?
A. P3,260.34
B. P3,280.34
C. P3,270.34
D. P3,250.34
Answer: Option A
550. A machine has been purchased and installed at a total cost of P18,000.00. The machine will retire at the end of 5 years, at
which time it is expected to have a scrap value of P2,000.00 based on current prices. The machine will then be replaced with an
exact duplicate. The company plans to establish a reserve funds to accumulate the capital needed to replace the machine. If an
average annual rate of inflation of 3% is anticipated, how much capital must be accumulated?
A. P18,854.38
B. P18,548.38
C. P18,458.38
D. P18,845,38
Answer: Option B
551. What is the effective rate corresponding to 16% compounding daily? Take 1 year = 360 days.
A. 17.35%
B. 17.45%
C. 17.55%
D. 17.65%
Answer: Option A
552. 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
Answer: Option A
553. 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
Answer: Option B
554. 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?
A. P15,030.03
B. P20,113.57
C. P18,289.05
D. P16,892.34
Answer: Option A
555. 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?
A. P7,563.29
B. P7,498.20
C. P7,340.12
D. P7,623.42
Answer: Option D
556. How long (in nearest years) will it take money to quadruple if it earns 7% compounded semi-annually?
A. 20 years
B. 18 years
C. 21 years
D. 19 years
Answer: Option A
557. How much should you put into a 10% savings account in order to have P10,000.00 in five years?
A. P6,216.21
B. P6,212.12
C. P6,218.21
D. P6,209.21
Answer: Option D
558. A man expects to receive P20,000 in 10 years. How much is that money worth now considering interest at 6% compounded
quarterly?
A. P11,042.89
B. P11,035.12
C. P11,025.25
D. P11,012.52
Answer: Option C
559. P500,000 was deposited 20.15 years ago at an interest rate of 7% compounded semi-annually. How much is the sum now?
A. P2,000,033.33
B. P2,000,166.28
C. P2,001,450.23
D. P2,002,820.12
Answer: Option B
560. 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%
Answer: Option A
561. 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
Answer: Option B
562. 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
Answer: Option C
563. 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
Answer: Option B
564. 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
Answer: Option C
565. 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?

A. P15,367.18
B. P15,249.13
C. P15,722.16
D. P15,482.64
Answer: Option B
566. On his 6th birthday a boy is left an inheritance. The inheritance will be paid in a lump sum of P10,000 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
Answer: Option A
567. 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?

A. P593,120.12
B. P593,452.12
C. P592,739.96
D. P593,888.96
Answer: Option D
568. 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?
A. P18,302.85
B. P18,450.89
C. P18,512.83
D. P18,638.29
Answer: Option A
569. The Philippine Society of Mechanical Engineers is planning to put up its own building. Two proposals being considered are:
a. The construction of the building now to cost P400,000.
b. 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?
A. P19,122.15
B. P19,423.69
C. P19,518.03
D. P19,624.49
Answer: Option D
570. 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%
Answer: Option D
571. 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%
Answer: Option C
572. 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
Answer: Option A
573. 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
Answer: Option C
574. 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
Answer: Option D
575. 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
Answer: Option A
576. 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
Answer: Option C
577. 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
Answer: Option B
578. 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
Answer: Option B
579. What nominal rate compounded annually would quadruple the principal in 4 years?
A. 41.42%
B. 40.81%
C. 41.79%
D. 40.45%
Answer: Option A
580. 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?
A. 8.12%
B. 8.00%
C. 7.92%
D. 8.32%
Answer: Option B
581. 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.
A. 10.12%
B. 10.00%
C. 10.92%
D. 10.32%
Answer: Option B
582. 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%
Answer: Option A
583. 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
Answer: Option A
584. 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
Answer: Option B
585. 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.
A. P201,689.91
B. P201,571.91
C. P201,345.91
D. P201,869.91
Answer: Option D
586. 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 the five-year period?
A. P44,512.89
B. P44,672.10
C. P44,851.64
D. P44,901.23
Answer: Option C
587. 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?
A. P155,890.12
B. P153,085.56
C. P154,200.12
eering Economics
margin is 50% of sales. The operating costs of the publishing are estimated at 15% of sales. If
acket, determine the percent of sales is their profit after taxes?

dozen gains 20%. If he sells the eggs at the same price after the costs of the eggs rises by
in percent?

d capital investment of P10,000,000 is required for a proposed construction firm and an

00. Annual depreciation is estimated to be 10% of the fixed capital investment. Determine the
if the annual profit is P3,500,000.

eing manufactured by Mr. Camus is 3200 pieces. With a manual operated guillotine, the unit
operated hydraulic guillotine was offered to Mr. Camus at a price of P275,000.00 and which cuts
ding the cost of money, how many months will Mr. Camus be able to recover the cost of the

m an amount of P100,000 with a rate of simple interest of 20% but the interest was deducted
was borrowed. If at the end of one year, she has to pay the full amount of P100,000, what is the

od of 15 months, at a simple interest rate of 15%, what future amount is due at the end of the

he bank. He received from the bank P1,842 and promised to repay P2,000 at the end of 10
interest.

0 from a bank for his tuition fee and promised to pay the amount for one year. He received only
ollected the advance interest of P80.00. What was the rate of discount?
 in the Philippines that when they grant a loan, the interest for one year is automatically
pon release of money to a borrower. Let us therefore assume that you applied for a loan with a
t an interest rate of 14% of which P11,200 was deducted and you were given a check of
mount of P80,000 one year after, what then will be the effective interest rate?

ays. The net interest after deducting 20% withholding tax is P890.36. Find the rate of return

is capital after payment of taxes. If the income from an available investment will be taxed at an
ate of return, before payment of taxes, must the investment offer to be justified?

of P20,000 by his employer Excel First Review and Training Center, Inc. with an interest of 6%
in advance. The corporation would accept a promissory note for P20,000 non-interest for 180
roceeds of the note.

a bank. She receives from the bank P1,340.00 and promised to pay P1,500.00 at the end of 9
discount rate or often referred to as the “banker’s discount”.

0 invested from June 21, 1995 to December 25, 1995 is P100. What is the rate of interest?

1,500.50 for 182 days at 5.2%?

3 years at the amount of P65,000. What is the effective rate of money?

nding to 18% compounded daily? Take 1 year is equal to 360 days.

 annually is the same as the rate of interest of 8% compounded quarterly?

fective rate of interest?

608.44 after 4 years compounded bimonthly. Find the nominal interest.

uble itself if invested at 5% compounded annually?

of P20,000 is left to a girl to be held in trust fund by her guardian until it amounts to P50,000.
fund invested at 8% compounded quarterly?

nd left for eight years, at which time the principal is withdrawn. The interest has accrued is left
e annual interest rate is 5%, what will be the withdrawal amount at the end of the 16th year?

ccount that yields 9.84% annually. Find how often the interest is compounded.

in the bank now and another P3,000 for the next 2 years. If he plans to withdraw P5,000 three
e purpose of buying shoes, what will be the amount of money left in the bank after one year of
st rate is 10%.

r from a friend at an interest rate of 1.5% per month instead of taking a loan from a bank at a
r you will pay by borrowing the money from the bank?

P 100 payments at the end of the third year and fourth year? The annual interest rate is 8%.
 at 8%. At the end of 6 years, it renews the loan for the amount due plus P2,000 more for 2
ue?

00 in a 15% security for 5 years. During that time, the average annual inflation is 6%. How
be in the account at maturity?

mmunications Engineers of the Philippines (IECEP) is planning to put up its own building. Two

w to cost P 400,000
ng now to cost P300,000 and at the end of 5 years, an extension to be added to cost P 200,000.

omical than proposal A if interest rate is 20% and depreciation to be neglected?

00 annuity starting at the end of the third year and continuing to the end of the fourth year, if

years to equate with a future amount of P 20,000? Assume i= 6% annually.

generator set for P 10,000.00 and agreed to pay the dealer uniform sum at the end of each
unded annually, that the final payment will cancel the debt for principal and interest. What is

ar annuity paying P 3,000.00 at the end of each year, with interest at 8% compounded

nk with interest at 5% compounded annually. He agrees to pay his obligations by paying 8 equal
at the end of 10 years. Find the annual payments.

100,000 downpayment and 10 deferred semi-annual payments of P 8,000 each, starting three
alue of the investment if the rate of interest is 12% compounded semi-annually?
000 at 12% interest and paid P 2,000 per annum for the last 4 years. What does he have to pay
pay off his loan?

1,500 and P 2,000 at the end of the 2nd year, 3rd year and 4th year, respectively in a savings
m. How much is in the account at the end of the 4th year?

ar bond was sold at 95%. What is the rate of interest of this investment?

d semiannually and will be redeemed at 110% on June 21, 204. It is bought on June 21, 2001
the bond.

. If its selling price is expected to decline at a rate of 10% per annum due to obsolescence,
ars?

n estimated life of 10 years with a salvage value of P 500. What is its book value after 8 years

that for any new equipment purchased, the annual depreciation cost should not exceed 20% of
ge value. Determine the length of service life necessary if the depreciation used is the SYD

00. Its estimated economic life is 10 years after which it will be sold for P 1,000.00. Find the
ing sum-of-years digit method

ompany, has a total gross income for a particular year of P 50,000,000. The taxable income
depletion is P 18,500,000. What is the allowable depletion allowance for that particular year?
il as 22%.
veloped an oil well which is estimated to contain 5,000,000 barrels of oil at an initial cost of $
rge during the year where it produces half million barrels of oil? Use Unit or Factor method in

tems at a labor cost of P 115 each, material cost of P 76 each and variable cost of P 2.32 each.
ow many units must be manufactured each month for the manufacturer to break even if the

ne product assembly line to produce signal generators. Weekly demand for the generators is 35
r day, 5 days per week. What is the maximum production time per unit in hours required of the

cable can be made up with either enameled wire or tinned wire. There will be 400 soldered
onnection on the enameled wire will be P 1.65 on the tinned wire, it will be P 1.15. A 100- pair
st P 0.55 per linear foot and those made up
ot. Determine the length of cable run in feet so that the cost of each installation would be the

uces a pair of Lebron James signature shoes at a labor cost of P 900.00 a pair and a material
ges on the business are P 5,000,000 a month and the variable costs are P 400.00 a pair.
r pair of shoes sold. If the shoes sell at P 5,000 a pair, how many pairs must be produced each
even?

n of the monetary consequences by using the theories and principles of economics

?

h forms the basis of a country’s domestic money supply?

oduct that contributes directly or indirectly to the satisfaction of human want?

tivity that contributes directly or indirectly to the satisfaction of human want?

d services?

e required to support human life, needs and activities?

e desired by human and will be acquired only after all the needs have been

brings together the sellers and the buyers of a product, factor of production or

r demanding unit of a commodity?

oduct, good or services available to buyer or consumer in exchange of monetary

only one buyer of an item for which there is no goods substitute?

few sellers and few buyers?

only one buyer and only one seller?

e are many buyers and many sellers?

he market situation is                    .

market situation is                      .

s/are:

are:

n”?

any given product is supplied by a very large number of vendors and there is no
ing the market?

which one is a characteristic of perfect competition?

mic friction
other vendors in the market
of the product
permit to sell
knowledge of the product

mies of scale are so significant that cost are only minimized when the entire output
o that the supply costs are lower under monopoly that under perfect competition.

xed in quantity or is difficult to increase, increasing the other factors of production will
put”. This statement is known as the:

product backed by the money to purchase it?

available for sale?

e price at which any given product will be supplied and purchased is the price that will
” This statement is known as the:

or primary product such as cloth, wool, flour, coffee, etc.?

rincipal that is based only on the original amount of the loan or principal?

ays in one year?

 ays.

ed time on the money value of an event, based on the earning power of equivalent

e worth of money at some time in the future is called              .

able future net earnings?

the use of borrowed capital?

nt to the principal for a given unit of time and usually expressed as a percentage of

principal which is based not only on the original amount of the loan or principal but
ous accumulated interest?

or the amount earned by a unit principal per unit time?

ual interval of time is called              .

time span?

nts are made at the end of each period starting from the first period?

nts are made at the beginning of the each period starting from the first period?

e a fixed time span but continues indefinitely or forever?

ayment does not begin until some later date in the cash flow?

dinary annuity?

me.
the first period.
he annuity.

ssued by business or corporation and by the government as a means of borrowing

mount the bondholder will receive through his possession of the bond?

dness of corporation usually for a period not less than 10 years and guaranteed by

f of legal ownership of a financial security?

or more corporations?

n on railroad equipment, such as freight and passenger cars, locomotives, etc.?

ons indicating the interest due and the date when such interest is to be paid is called

n certain specified assets of the corporation?

xcept a promise to pay by the issuing corporation is called              .

ges securities which it owns such as the stock or bonds of one of its subsidiaries.

owner name are recorded and the interest is paid periodically to the owners with

before maturity date?

the issuer can redeem it before it matures?

e redeemed from the bondholder is called              .

he value of an asset due to constant use and passage of time?

where it assumes that the loss in value is directly proportional to the age of the

where it assumes that a sinking fund is established in which funds will accumulate

where it assumes that the annual cost of depreciation is a fixed percentage of the

which of the following is the formula in finding the sum of years’ digits?

n as              .

uction in the demand for the function that the equipment or asset was designed to

uction of the physical ability of an equipment or asset to produce results?

alled              .
e of certain natural resources such as mines, oil, timber, quarries, etc. due to the

ng depletion charge?

od

thod

omputing depreciation, the depletion charge is equal to either               whichever is

axable income
he net taxable income
or 50% of the net taxable income
or the net taxable income

ing depletion is commonly known as              .

computing depletion?

iven year is equal to:

old during the year divided by the total units in property
of units sold during the year
sold during the year
its in property

h of all depreciation effects over the depreciation period of the asset?

he present value of annuity of one is called              .

buyer to a willing seller for the property when neither one is under the compulsion to

     .
 disinterested third party, different from the buyer and seller, will determine in order

m which arises from the exclusive right of a company to provide a specified product

equipment now in place had been bought for a second hand dealer or some other

, which of the following represents the first cost?

es

rth of a physical property for specific reason is called              .

s due to poor estimates as to the life of the equipment is called              .

ociated with an asset for an infinite period of time?

as              .

ves that accomplish the same purpose but have unequal lives?
oject evaluations where benefits and costs accrue to different segments of the

ng what will not be received if a particular strategy is rejected?

nd method of computing depreciation is seldom used in the industry?

)^-n?

+i)^n]/[((1+i)^n)-1]?

person conducts his business alone and entirely for his own profit, being solely

f law, having the right of succession and the process, attributes and properties
existence.

nization?

business organization?
 f the partnership
s personal assets) only will be used to pay the liabilities
he debt of the partnership
onal capital

es to be connected with the partnership.

f partners to another.
er.

rt a corporation is three.
orators.
liable to the extent of their investments.

purpose of conducting a business and recognized by law as a fictitious person is

he purpose of engaging into a business for profit is called              .

ders who have a residual claim on the assets of the corporation after all other claims

s certain preferences than ordinary stock?

ard of directors of the corporation decides to distribute to ordinary shareholders is

any’s assets after all outside liabilities (shareholders excluded) have been allowed

rship?
sh and operate an enterprise are generally called              .

n business organizations?

ss enterprise without consideration of obligations to financial contributors and claims

siness has earned through the favorable consideration and patronage of its
conducted policies and operations.

tangible asset?

e example of what type of asset?

present work of the cash flow on a project is zero of the interest earned by an

an inventory account adjustment?

 change called?

ransactions?

nformation of which is obtained from the journal is called?

n is recorded in this book.

business as a result of the sale of goods is called              .

es EXCEPT one. Which one?

h which accounts receivable are collected?

net sales is called              .

taxes?

doubling time for the invested money is needed?

a capital asset is called?

f capital asset is called?

by a bank in lien of a term deposit?

e of one currency in terms of the others? This term is usually applies to the floating

tion’s currency in terms of the accepted standard (Gold, American dollar or the

because goods are not available for consumption rather than consumer really want

orm a given project is called              .

ion of the initial cost by a periodic changes to operation as in depreciation or the

r prearranged programs is called              .

y is computed by which formula?

equations for compound interest for a 1 year period is known as              .

e:

ry at hand

to              .

ndefinite life rather than a specific maturity?

d run by a group of individuals for their mutual benefit is called              .

by a trade body or government as a means of regulating the price of that product?

ue is known as              .

y is known as              .

sured in terms of:

ty?

inventories and prepaid expenses?

ent liabilities?

h which accounts receivable are collected?

ry on hand
utstanding shares

r’s equity?

are to earnings per share called?

t sales

the number of outstanding shares

f inventory on hand

les
 the number of outstanding shares
t of inventory on hand

re of common stock?
les

the number of outstanding shares

t of inventory on hand

les

the number of outstanding shares

t of inventory on hand

d using which formula?

value of one alternative becomes equal to the value of another?

lculated using which formula?

y in years, for cumulative net annual profit to equal the initial investment?

ost?

preciation method?
d
ance method
method

d?
t greater than a straight line amount
lesser than a straight line amount
equal to straight line amount
any way related to straight line amount

a national income and output usually accompanied by a fall in the general price
an industry forming a perfect collusion purposely formed to increase profit and block

nk which forms part of the country’s money supply is called              .

ixed in quantity or is difficult to increase, increasing the other factors of production will
put”.

are to the earnings per share?

r’s equity?

before taxes to net sales?

ds between two or more markers in order to take profitable advantage of any

?

erest for a specified period of time is called              .

e unit of time.
ned for a certain period of time is?

pal is known as?

equipment of the issuing corporation.

ct/services that the action by one will almost inevitably result in the similar action by

e accounting records.

to gradual extraction of its contents.

hird party to establish a price good enough to both the seller and the buyer.

e a specific product or services in a given region of the country.

t worth of all costs or replacement, operation and maintenance.

on usually for a period not less than 10 years and guaranteed by a mortgage on
es.
an operating unit.

plied by a number of vendors and there is nothing to prevent additional vendors

uired profit on the invested capital is included as a cost. A method called as

to a future amount of P 15, 000 with i=5%

l yearly payments, each combining an amortization installment and interest at 4% on

should be the amount of each payment?

. What is the value of the money after 25 years, assuming that nothing was

or 4 years and 3 month, if it bears 12% ordinary simple interest?

ars and with a bond rate of 10% payable annually is to be redeemed at P 1040 at the
etermine the yield at this price.

as a fund for expansion. If the fund earns 9% compounded annually, determine

3, 000, 000 can be built?
rdinary annuity?

me.
each period.
he annuity.

gradient series of P5,000 on the first year, P4,500 on the second year, P4,000 on the
e equivalent uniform periodic payment if interest is 5%?

unt to recover is spread uniformly over the estimated life of the asset in terms of the

ds cannot have a salvage value of zero?

m of money is regularly deposited at compound interest in a real or imaginary fund in

depreciation of an asset at the end of the asset’s estimated life.

hin 60 days but offers a 3% discount for cash in 30 days. Find the rate of interest.

hilippines that when they grant a loan, the interest for 1 year is automatically deducted from the principal amount upon
assume that you applied for a loan with the bank and the P80000 was approved at an interest rate of 14% of which
eck of P68800. Since you have to pay the amount of P80000 one year after, what then will be the effective interest rate?

bank. He received from the bank P1,340.00 and promised to pay P1,500.00 at the end of 9 months. Determine the
unt rate or often referred to as the “Banker’s Discount”.
missory note that he signed in the amount of P25000.00 for a period of 1year. He received only the amount of
interest and an additional amount of P85.00 for notarial and inspection fees. What was the rate of interest that the bank

r employer CPM Industrial Fabricator and Construction Corporation with an interest at 6% for 180days on the principal
ept a promissory note for P20,000 non-interest for 180days. If discounted at once, find the proceeds in the note.

annum simple interest. How much will be due at the end of 75 days?

ent of P1,000,000 for 30 days at 7.5% per year. If withholding tax is 20%, what is the
nd of the month?

1,200 due at the end of 100days but offers a 4% discount for cash in 30days. What is
er can afford to borrow money in order to take advantage of the discount?

ffered the options of paying P250 cash at the end of 30days or P270 at the end of
e interest if he agree to pay at the end of 120days?

loan of P1500 from Mr. Avila and signs a note promising to pay the principal and accumulated simple interest at the rate
Mr. Avila discounts the note at the bank whose discount rate is 6%. What does he receive?

s. The net interest after deducting 20% withholding tax is P890.36. Find the rate of

ith simple interest of 12%, find the present worth of P50,000 which is due at the end
 omise to pay the amount for 1year. He received only the amount of P1,920 after the
was the rate of discount and the rate of interest that the bank collected in advance?

e end of 90days. He was offered a 10% discount if he pays in 30 days. Find the rate

160 days or P190 at the end of 40 days. Determine the rate of interest.

d for 6 months at 8% simple interest.

mpounded quarterly is            .

uses a simple discount rate of 14%. He signs a promissory note promising to pay P500.00 per month at the end of 4th,
amount of money that he received from the bank.

inuously is given on the account. What is the accumulated amount of P10,000 after

0 is left to a girl to be held in trust fund by her guardian until it amount to P50000.00.
d is invested at 8% compounded quarterly?

s. How much is that worth now considering interest at 8% compounded quarterly?

% compounded quarterly. Compute the compound interest after 4 years and 9

h is P5000 worth in 10 years in a continuously compounded account?

ears and 6 months and bears on interest of P85649.25. What is the rate of interest if

pound interest of P50,000 if the interest rate is 9% compounded quarterly?

d 9 months ago at an interest of 8% compounded quarterly. If the sum now is

ed?

es P22,318.30 after 5years.

ded quarterly?

ed quarterly?

invested at 5% compounded annually?

which is equivalent to 5% nominal annual interest compounded continuously.

to triple itself at 5% per annum compounded continuously.

fund at the end of 8 years. How much should he invest in a fund that will pay 6%

ompute the equivalent nominal annual interest compounded continuously.

unded continuously for 10 years if the compound amount factor is equal to 1.34986?

rest per month, compounded continuously on the unpaid balance purchases made
interest.

continuously, compute the effective annual rate if interest.

nt of P500 compounded annually at nominal rate of 5% and if it is compounded

ate of interest is charged for a continuously compounded loan?

unded continuously for 8 years if the present worth factor is equal to 0.6187835?

s from now for a 10% simple interest and 10% compound interest per year? (P5000

r 6 months at 8% compounded quarterly.

d of time at a given rate interest, compute the value of the single payment present

eriod of 5 years is 1.33822. What is the nearest value of the interest rate?

or a period of 8 years is equal to 0.58201, compute the nearest value of the rate of

ly, compute the single payment amount factor for a period of 6 years.

or 8 years, at which time the principal is withdrawn. The interest has an accrued left
st is 5%, what will be the withdrawn amount at the end of the 16th year?

for a period of 8 years.

6% .
thly.

ously.

ounded quarterly is equal to 1.612226.

pounded bi-monthly is equal to 0.787566.

nt factor compounded bi-monthly for 5 years is equal to 1.487887.

years for an effective rate of 8.33% if it is compounded continuously.

factor if it is compounded continuously.

or if it is compounded continuously.

g would it take in years for the amount of the loan and interest to equal P3280 if it

g would it take in years if it was made at 8% compounded quarterly.

g would it take in years if it was made at 8% compounded continuously.

er 4 years compounded bi-monthly. Find the nominal rate of interest, the effective
t if it is compounded quarterly.

ble itself if it is invested at 6% simple interest, compounded semi-quarterly, and

it is invested at 10% simple interest.

nvested at 10% compounded annually.

compounded continuously.

nd 6 months and bears on interest of P85,659.25.

ompounded quarterly?

compounded semi-quarterly?
mpounded semi-quarterly.

mpounded bi-monthly.

unt factor for 8% compounded bi-monthly for 5 years.

of 8% for a period of 4 years.

ed continuously?

t factor if it is compounded continuously?

or if it is compounded continuously?

eriod of 5 years is 1.33822, what is the nominal rate of interest?

compounded semi-annually of problem no. 324?

compounded quarterly of problem no. 324?

arterly. If it takes money to quadruple in 17.5 years, find the value of x.

no. 327?

327 is compounded daily?

nk that charges an interest rate of 12%.

5 years if it was made at 12% simple interest?

5 years if it was made at 12% compound semi-quarterly?

5 years if it was made at 12% compound continuously?

quarterly, tax free for 9 years and 3 months. How much interest was earned at the

ch earned 9% compounded quarterly tax free. After how many years would it be

% compounded quarterly and was free of taxes. After exactly 5 years, the total
of x?

ate of interest?
ey if it is invested at x% compounded semi-annually. Find the value of x.

he rate of x% compounded quarterly. Compute the value of x.

arterly. If it takes the money into quadruple in 17.5 years, find the value of x.

in a bank account, and today it is worth P2.370.00. The bank pays interest
n this account?

friend at an interest rate of 1.5% per month instead of taking a loan from a bank at a
y you will save or lose on the transaction.
k

of P1000,000 to be made in 10 years with an interest of 12% compounded

ertain bank earns 6% interest per annum compounded monthly. If the earnings from
the net value of the deposit be after three quarters?

ounded semi-annually is:

bank earning an interest of 7.5% per annum. Determine the total amount at the end
withdrawn during the period.
 18% compounded daily? Take 1 year is equal to 360 days.

when invested at a certain nominal rate of interest compounded semi-annually,

g effective rate.

d quarterly.

rate of 18% compounded semi-quarterly?

8% compounded quarterly, find the compounded interest at the end of 10 years.

company for 6 years at 12%. At the end of 6 years, it renews the loan for the amount
is the lump sum due?

to quadruple if it earns 7% compounded semi-annually?

n interest rate of 24% compounded semi-annually. How much would the sum be

% compounded monthly, determine the compounded interest after 7 years and 9

of 24% compounded semi-annually. After how many years will the sum be

elds 9.84% annually. How often is the interest compounded?

m to replace the cars of its sales representatives at the end of every 5 years. If the present price of the approved type of
of 5 years of 60% its present value, how much money must the company accumulate for 5 years if inflation annually is
yearly.

% security for 5 years. During that time, the average annual inflation is 6%. How
nt at maturity?

d 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
. The machine will then be replaced with an exact duplicate. The company plans to establish a reserve fund to
chine. If an average annual rate of inflation of 3% is anticipated, how much capital must be accumulated?

10%, what interest rate will take care of inflation and the cost of money?

ost P1000 and will pay P50 interest each year for 20 years. The bond will mature at the end of 20 years and he will
inflation during this period, what rate of return will the investor receive after considering the effect of inflation?

o years is equal to P1471.07. What is the rate of inflation if the interest rate is equal

st of money and inflation. If the nominal rate of interest is 6%, what is the rate of
,000. Other expenses including installations amounted to P30,000. At the end of its estimated useful life of 10 years, the
g straight line method of depreciation, what is the book value after 5 years?

vage value of x at the end of its life of 5 years. The book value at the end of the 4th
straight line method depreciation?

at the end of its useful life of 6 years. The book value at the end of 5 years is
eciation, what is the first cost of the machine?

f P5M and is estimated to have a life of 20 years with a salvage value of P1M. A certain equipment worth P570,000 was
ate economically for 15 years with a salvage value of P50,000. Determine the book value of the plant and equipment
hod.

fe expectancy of 8 years and has a salvage value of P3,500 at the end of its life.
P38,500. Using straight line method of depreciation, solve for the value of x.

000 and the cost of handling and installation is P30,000. If the book value of the equipment at the end of the 3rd year is
ed to be 5 years, determine the salvage value of this equipment at the end of 5 years.

,000. He spent an additional amount of P30,000 for installation and other expenses. The salvage value is 10% of the first
be P291,500 using straight line method of depreciation, compute the useful life of the equipment in years.

cost of installation is P30,000. If the salvage value is 10% of the cost of equipment
t the end of the fourth year. Use straight line method.
salvage value of P300,000 at the end of its life of 5 years. Determine the total

imated economic life is 10 years after which it will be sold for P1,000.00. Find the
t line method.

enerator for P4000 will allow the company to produce its own energy. The configuration can be assembled for P500. The
10 years. The maintenance cost is P300 per year, and cost to operate is P0.85 per hour for fuel and related cost. Using
t for the operation? There is a P400 salvage value for the system at the end of 10 year.

and a salvage value of P10,000.00 after 10 years. What is the straight line method
st?

and a salvage value of P10,000.00 after 10 years. What is the book value after 5
e?

age of P2,000 at the end of its life of 10 years. Find the book value at the end of the
on.
 timated life is 10 years after which it will be sold for P1,000.00. Find the book value
SYD) depreciation is used.

ave radio equipment for P6M. Freight and installation charges amounted to 3% of the purchased price. If the equipment
h a salvage value of 5%, determine the depreciation charge during the 5th year using the Sum of Year Digit Method.

ons companies contracted for the purchase and installation of a fiber optic cable linking two major Asian cities at a total
d installation charges at 10% of the above total contract price. If the cable depreciated over a period of 15 years with zero
uring the 8th year using the sum of year digits method?

and has a salvage value of P350 at the end of 8 years. Determine its book value at

onomic life of n years and a salvage value P350 at the end of n years. If the book value at the end of 4 years is equal to
equipment using the sum of years digit method.

and plans to keep it for 20 years. If the salvage value is zero at the end of the 20th
Use sum of years digit method.

8 years and salvage value of x after 8 years. If the book value of the equipment at
alvage value x using the sum of years digit method.

very new equipment purchased, the annual depreciation should not exceed 20% of
Determine the length of service if the depreciation used is the SYD Method.
life of 10 years and a salvage value of 6.633% of the first cost at the end of 10 years. If it has a book value of P58,914 at
t of the machine if the constant percentage of declining value is used in the computation for its depreciation. (Matheson’s

o have a life of 10 years. If the annual rate of depreciation is 25%, determine the
the declining balance method.

00 will have an estimated salvage value of P18,000 at the end of 8 years. Using
book value and the total depreciation at the end of the 5th year.

of P20,000 and has a salvage value of P1,000 at the end of 10 years. Determine the
king fund method at 3% interest.

seful life of 8 years with a salvage value of P25,000 at the end of its useful life. If
t method is used in the calculation of depreciation?

c life of 8 years and salvage value of P400 at the end of 8 years. The first year
d is used in the calculation of the depreciation?

50,000 and has an economic life of 8 years with a salvage value of P9,000 at that
to P44,475, what method is used in the calculation of the depreciation?

a life of 8 years with a salvage value of P10,000 at the end of its useful life. If the
, what method is used in the calculation of depreciation?
s a salvage value of P15,000 at the end of its useful life which is 12 years. If the
method is used in computing the depreciation. Assume money is worth 6% annually.

vage value of 10% of its cost at the end of its economic life of 35,000 operating
rs. Determine its book value at the end of the first year.

vage value of 10% of its cost at the end of its economic life of 36,000 operating hours in a period of 5 years. In the first
at the end of the 2nd year it was used for 15,000 hours, find the depreciation at the second year.

ife of 4 years and a salvage value of P5000. The production output of this machine in units per year is 1000 units for the
nits for the third year, and 4000 units for the fourth year. If the units produced are in uniform quality, what is the
.

with a salvage value of x pesos. The machine is expected to last for 28500 hours in a period of 5 years. In the first year
k value at the end of the first year is P220,000, compute for the salvage value x in pesos.

ty to satisfy human want

usually does not bring voting right to the owners and the dividend is fixed and

pay to a willing seller for the property where each has equal advantage and is under

with use over a period of time. It could mean a difference in value between a new
 o few suppliers of a particular product that one supplier’s actions significantly affect

of an item for when there are no goods substitute.

he book of an enterprise.

d output usually accompanied by a fall in the general price level.

industry forming a perfect collusion purposely formed to increase profit and block new

seller with many buyer.

and buyer.

nd output usually accompanied by a fall in the general price level.

nterval of time.
pital.

ogether.

ks certificate

buyers exert controlling influence over many sellers.

groups or organizations dominate commerce in one business market or commodity.

t is made after several periods, after the beginning of the payment.

uals the total operating expenses.

l invested which for some reasons cannot be retrieved.

alled

re a construction project for operation.

dition unit of a product.

 sold for junk.

the original cost less the amount which has been charged to depreciation.

the factory and the direct material cost of all materials that go into production is

nd the worth of money at some time in the future is called

nit is

edemption value on an indicated date or maturity date and pay a certain sum

l life.

materials on hand as of a given date.

ble during the next period or any other material which will be sold.
or property and for which allows a claim by the injured party to recover damages.

e period of time

ired to support human life and activities that will be purchased in somewhat the
iderably.

offered for sale at a certain price at a given place and time.

ty due to the passage of time.

or the purpose of engaging business for profit.

where in the business is own entirely by one person.

tract is not considered intelligent.

y to satisfy human want.

ty or service is supplied by a number of vendors and there is nothing to prevent

red by human and will be purchased if money is available after the required

pability of a corporation.

transaction is recorded.

be operated at a profit.

dual or corporation to do business in a certain region.

unting records of an enterprise.

at P200.00 per copy. At what price should this book be sold so that by giving a 20%

pital after payment of taxes. If the income from an available investment will be
of return, before payment of taxes, must the investment offer to be justified?
ct assembly line to produce signal generators. Weekly demand for the generators is 35 units. The line operates for 7 hours
production time per unit in hours required of the line to meet the demand?

f sales. Operating expenses such as sales and administration are 15% of sales.
percent of sales is their profit after taxes?

ing sub-assembly B within a company, the following data have been gathered:

assembly B to an outside company. For an order of 100 units, what is the cost per

ains 20%. The cost of the eggs rises by 12.5%. If he sells at the same price as

etion stage can be completed in 50 days of 8 hour/day work, with 50 men working. With the contract expiring in 40 days,
dd 15 men on the job, overtime not being permitted.

elay, and the men are paid P150 per day, how much money would he save with the

alary of a saleslady is partly constant and partly varies as the value of her sales for the month. When the value of her
the month is P900.00. When her monthly sales go up to P12,000.00, her monthly salary goes up to P1,000.00. What
or the month will be P2,000.00?

nd then sold it to Rudy at a profit of 40%. Rudy then sold the VCR to Noel at a
costs Jojo, how much did Jojo pay for the unit?
of its net cost. If the TV set is sold to a customer at a profit of 25% of the net cost,

a P450,000 contract to install the machineries of an oil mill failed to finish the work on time. As provided for in the
t to one fourth of one per cent per day for the first 10 days and 0.5% per day for the next 10 days and one per cent per
was P60,750.00, how many days was the completion of the contract delayed?

ocks plus delivery cost to the processing plant each is P2,400.00 per cubic meter.
r square meter and that of the granite into tiles also is P600.00 per square meter.
ile per cubic meter of block and sells P400 per square meter, and granite gives a net yield of 50 square meters of tiles
quare meter. Considering all other costs to be the same, the granite is more profitable than the marble by how much?

ernment bonds and stocks that will give an overall annual return of about 5%. The money to be invested in government
e stocks of about 6%. The investments are in units of P100.00 each. If he desires to keep his stock investment to
how many stocks should be purchased.

%. If power costs P3.00 per kw-hr for the first 50 kw-hr, 2.90 per kw-hr for the second 50 kw-hr, P2.80 for the third kw-
r is reached. How much does it cost to run this motor continuously for 7 days?

eters long is desired to be constructed over a well-compacted gravel road, together with the necessary concrete curbs and
e on an even level grade, a 500 cubic meters of sand filling is necessary, over which the 10 inch concrete pavement will

00 per cubic meter

aterials) including curing = P220 per sq. Meter

r contingency?

hr per month of electric energy from National Power Corporation at P2.00 per kw-hr and sells all this to consumers after
erage rate per kw-hr should this energy be sold to break even if the following are other monthly expenses in its
0,000
000 Maintenance P300,000

km stretch of road is confronted with a problem of choosing between two possible

hine.

Monthly rental P35,000 P6,500

0 P10,000

en at P150 per working day. The job can be completed in 32 weeks working 6 days a week. The project requires 16,670
. If the asphalt mix is to be hauled by a contractor at P42 per cubic meter per km of haul. How much is site B more

s required for a proposed manufacturing plant and an estimated working capital of P2,000,000. Annual depreciation is
ent. Determine the rate of return on the total investment if the annual profit is P2,500,000.

ne Daily Inquirer for the construction of a transmission line from a mini-hydroelectric power plant to the substation which
lectrical posts must be placed at an interval of 50 m. The electrical posts must be 30 feet long, 8 inches in diameter at the
wer house is 15 m from the first electric post and the substation is 20 m from the last electric post. Compute the estimated

P5,000 including delivery to the site. Labourer at P180 per day and 5 laborers can dig and erect 3 posts per day.
n strung wires complete 150 meters per day. Electric wire cost P4.00 per meter. Use only 5 laborers and 4 electricians for
h is paid at P400 per day. Contingency is 10% and profit is 25%.

nment service, Mrs. Salud Araoarao was able to get a retirement lump sum of P2,300,000. As a hedge against inflation,
te at Pagadian City and the remainder were invested as follows:

market and stock is P50,000, How much did she invests in real estate?
 nufactured by Mr. Alarde is 3200 pieces. With a manual operated guillotine, the unit cuffing cost is P25.00. An
ered to Mr. Alarde at a price of P275,000.00 and which cuts by 30% the unit cuffing cost. Disregarding the cost of
le to recover the cost of the machine if he decides to buy now?

e the ore contains on the average of ten ounces of gold per ton. Different methods

method of processing yield the biggest return?

ki engines in containers to avoid the necessary crating of the engines. JRT Motors Inc. will pay freight on container load
ainer is completely filled with engines. Record shows that due to engine size, JRT Motors Inc. has shipped only 30 tons
r kilograms.

ped at the rate of P3.50 per hundred kilograms with the freight bill computed only on the actual weight shipped. The cost
ncrease the shipping weight from 1500 kg to 1520 kg per engine. How much more economical shipping the engine in

d mill for fine grinding of paint with an output of 100 liters per hour using glass beads as grinding media. Media load in
ully replenished in 2 months time at 8 hours per day operation, 25 days a month. A ceramic grinding media is offered to
ds 30 kg load in the sand mill, but guarantees an output of 120 liters per hour and full replenishment of media in 3
er how much is a difference in profit between the two media?

ted at a simple interest for three years, what is the rate of interest?

00,000 with a rate of simple interest of 20% but the interest was deducted from the loan at the time the money was
pay the full amount of P100,000, what is the actual rate of interest?

months, at a simple interest rate of 15%, what future amount is due at the end of
ith simple interest at 12%, find the present worth of P50,000, which is due at the end

k. He received from the bank P1,842 and promised to repay P2,000 at the end of 10

18% interest per annum, what is the total amount to be repaid at the end of one

but if paid within 30 days it will have a 3% discount. Find the rate of interest.

romised to pay the amount for one year. He received only the amount of P1,920
80.00. What was the rate of discount?

romised to pay the amount for one year. He received only the amount of P1,920
80.00. What was the rate of interest that the bank collected in advance?

er 12 months if the sum of P25,000 is invested today at simple interest rate of 1% per

er 12 months if the sum of P25,000 is invested today at simple interest rate of 1% per
the Philippines that when they grant a loan, the interest for one year is automatically deducted from the principal amount
refore assume that you applied for a loan with a bank and the P80,000 was approved at an interest rate of 14% of which
ck of P68,800. Since you have to pay the amount of P80,000 one year after, what then will be the effective interest rate?

ys. The net interest after deducting 20% withholding tax is P890.36. Find the rate of

annum simple interest. How much will be due at the end of 75 days?

pital after payment of taxes. If the income from an available investment will be
rate of return, before payment of taxes, must the investment offer to be justified?

mmercial bank which has a simple interest of 16% but the interest is to be deducted from the loan at the time that the
the end of one year. How much is the actual rate of interest?

annum simple interest. How much will be due at the end of 75 days?

000 by her employer CPM Industrial Fabricator and Construction Corporation with an interest rate of 6% for 180 days on
on would accept a promissory note for P20,000 non-interest for 180 days. If discounted at once, find the proceeds of the

simple interest of 12%, find the present worth of P20,000 which is due at the end of

issory note that he signed in the amount of P25,000.00 for a period of one year. He receives only the amount of
interest and an additional of P85.00 for notarial and inspection fees. What was the rate of interest that the bank collected
 bank. He received from the bank P1,340.00 and promised to pay P1,500.00 at the
st.

ank. He receives from the bank P1,340.00 and promised to pay P1,500.00 at the
iscount rate or often referred to as the “banker’s discount.”

t who ask P1,250.00 at the end of 60 days. Annie wishes to pay immediately and
n the assumption that money is worth 8% simple interest. What is the cash price?

He receives from the loan shark and amount of P1,342.00 and promised to repay
mple interest rate?

00 invested for the period from January 15,1996 to October 12,1996, if the rate

d from June 21,1995 to December 25,1995 is P100. What is the rate of interest?

ole was given by her mother a certain sum of money as birthday present. She decided to invest the said amount on 20%
on Christmas day at an amount of P10,000.00, how much did Nicole receive from her mother on her birthday?

for 182 days at 5.2%?

 at 7% from March 1, 2006 to November 1, 2006 at 7% interest. How much is the

bank earning an interest of 6.5% per annum. Determine the total amount at the end
withdrawn during this period?

at the amount of P65,000. What is the effective rate of money?

e bank earning an interest of 7.5% per annum. Determine the total amount at the
not withdrawn during the period.

of P80,000 to be made in six years with an interest of 12% compounded annually.

18% compounded daily? Take 1 year is equal to 360 days.

ually, yields the same amount as 16% compounded quarterly?

is the same as the rate of interest of 8% compounded quarterly?

uarterly could be used instead of 12% compounded semi-annually.

ate of interest?
ested at 8% compounded quarterly for 5 years and 6 months.

fter 4 years compounded bimonthly. Find the nominal interest.

% compounded quarterly, then what is the compound interest at the end of 10

18% compounded semi-quarterly?

of P100,000 to be made in 10 years with an interest of 12% compounded quarterly.

o increase by P3,000 if interest at 12% compounded semi-annually?

he bank earning an interest of 7.5% per annum. Determine the total amount at the
not withdrawn during the period.

f if invested at 5% compounded annually?

rate of 18% compounded semi-monthly?

ded semi-annually?
 ually, how much will a deposit of P1,500 be in 15 years?

s. How much is that money worth now considering interest at 8% compounded

a compound interest of P50,000 if the interest rate is 9% compounded quarterly?

nded semi-annually to a rate compounded quarterly.

t 5% compounded quarterly?

000 is left to a girl to be held in trust fund by her guardian until it amounts to P50,000.
is invested at 8% compounded quarterly?

4% compounded quarterly, find the compounded interest at the end of 10 years.

or eight years, at which time the principal is withdrawn. The interest has accrued is
al interest rate is 5%, what will be the withdrawal amount at the end of the 16th year.

20 years ago. Today, it is worth P3,000.00. Interest is paid semi-annually.

 business for a period of six years. With a given interest rate on the investment of
will he collect at the end of the sixth year?

ate of 12% per annum, compounded quarterly. What is the effective rate?

at yields 9.84% annually. Find how often the interest is compounded.

erest of 11.56%?

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
ll be the amount of money left in the bank after one year of his withdrawal? Effective annual interest rate is 10%.

1998 in order to accumulate P2,000 on January 1, 2003? Money is worth 6%.

inuously is given on the account. What is the accumulated amount of P10,000 after

te a total of P10,000 in a savings account at the end of 10 years. If the bank pays
the initial deposit?

an interest of 8% per annum. What is the initial amount that must be deposited to
% compounded monthly, determine the compounded interest after 7 years and 9

mpounded quarterly. What is the effective annual interest rate?

friend at an interest rate of 1.5% per month instead of taking a loan from a bank at a
pay by borrowing the money from the bank?

unt that pays 8% interest compounded annually. Approximately how much money

in a bank account, and today it is worth P2,370.00. The bank pays interest
n this account?

8 at an interest rate of 24% compounded semi-annually. How much would the sum

ments at the end of the third year and fourth year? The annual interest rate is 8%.

ck in one year by P700.00. What is the rate of interest, i% per year compounded
nvestment is positive? Assume i ≥ 0.

At the end of 6 years, it renews the loan for the amount due plus P2,000 more for 2
d at a total cost of P18,000.00. The machine will retire at the end of 5 years, at
f P2,000.00 based on current prices. The machine will then be replaced with an
a reserve funds to accumulate the capital needed to replace the machine. If an
ated, how much capital must be accumulated?

16% compounding daily? Take 1 year = 360 days.

000 is left to a girl to be held in a trust fund by her guardian until it amounts to
f the fund is invested at 8% compounded quarterly?

of 24% compounded semi-annually. After how many years will the sum be

% security for 5 years. During that time, the average annual inflation is 6%. How
account at maturity?

aid in 5 years in one lump sum at 12% compounded annually. How much profit in

ney to quadruple if it earns 7% compounded semi-annually?

ngs account in order to have P10,000.00 in five years?

ars. How much is that money worth now considering interest at 6% compounded

an interest rate of 7% compounded semi-annually. How much is the sum now?

s accounts four times a year. What is the effective annual interest rate?

n 1 year and P75,000 due in 4 years. He agrees to pay P50,000.00 today and the
e end of two years if money is worth 5% compounded semi-annually?

and compound interest on a savings deposit of P50,000 at 10% per annum for 3

ly, find the equated time for paying a loan of P150,000 due in 1 year and P280,000

id out the amount of P75,000.00. The interest was computed at 18% compounded

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
nterest of 18% compounded yearly, how much deposit will the couple have to make on the birth of a child to them?

nce. The inheritance will be paid in a lump sum of P10,000 on his 21st birthday.
f the boy’s 6th birthday, if the interest is compounded annually? Assume i = 4%.
ded 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
have at the end of 10 years when his son will be starting his college education?

ount earning 4% per annum compounded quarterly, what will be the deposited

neers is planning to put up its own building. Two proposals being considered are:
400,000.
cost P300,000 and at the end of 5 years, an extension to be added to cost

an proposal A if interest rate is 20% and depreciation is to be neglected?

ompounded monthly. Find its effective rate.

rges an interest of 1.5% per month. What is the effective interest rate per year?

ars. If interest is computed at 6% compounded quarterly, how much is it worth

d 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
compounded quarterly, when will the child receive the money?

ents 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
money is worth 10% compounded annually.
 if invested at 8% compounded annually?

great grandfather deposited P1 in a savings account. Today, the bank notified you
uch is the account today if it earns 8% per annum?

ent of P200,000 to be made in 10 years with an interest of 10% compounded

ccount that pays 8% interest compounded annually. How much money will be in the

would quadruple the principal in 4 years?

dential lot. Today you sell it at P50,000. What is your annual rate of appreciation?

ain rate of interest compounded annually for 2 years. If the accumulated interest at
terest.

at the end of the year. The project would terminate at the end of the 5th year and the
25,000 at that time. What is the rate of interest for this project to break even?

due in 2 years hence, whose maturity value is P3,200. What is the discount value
0 from DJ. Two years later, JM borrowed again from DJ an amount of P5,000. JM paid P1,000 on June 1993 and
e 1995. What was the amount borrowed by JM on June 1990 if the interest is 8% compounded annually?

sit that yields 10% for his retirement 30 years from now. If the inflation rate is 5%,
in terms of today’s peso.

0,000 today to be repaid in five years in one lump sum at 12% compounded
ded annually, how much profit, in today’s pesos, is realized over the five-year period?

g an existing machine at the end of 2002. The new machine to replace the existing one will have an estimated cost of
d by the sale of the old machine as scrap for P30,000. To accumulate the balance of the required capital, the firm will
interest at 5% compounded quarterly:

end of 2002 to purchase the new machine?

 D. P156,930.38
Answer: Option B
588. 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%
Answer: Option A
589. 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%
Answer: Option A
590. What interest rate, compounded monthly, is equivalent to a 10% effective rate?
A. 9.45%
B. 9.26%
C. 9.65%
D. 9.56%
Answer: Option D
591. 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
Answer: Option B
592.) 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?
A. P147,520.20
B. P147,346.02
C. P147,902.89
D. P147,021.81
Answer: Option B
593. 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?
A. P146,323.08
B. P146,992.99
C. P146,846.92
D. P146,022.82
Answer: Option A
594. 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
Answer: Option A
595. What is the future amount of P50,000 if the single payment compound amount factor of this investment is 1.23%
A. P61,700
B. P61,900
C. P61,200
D. P61,500
Answer: Option D
596. 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
Answer: Option C
597. 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?
A. 3.1%
B. 3.3%
C. 3.5%
D. 3.7%
Answer: Option D
598. 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?
A. 11.55%
B. 11.66%
C. 11.77%
D. 11.88%
Answer: Option A
599.) 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?

A. P2,180,968.95
B. P2,190,968.95
C. P2,160,968.95
D. P2,170,968.95
Answer: Option D
600. The paper currency issued by the Central Bank which forms part of the country’s money supply.
A. T-bills
B. Bank note
C. Check
D. Coupon
Answer: Option B
601. Reduction in the level of national income and output usually accompanied by the fall in the general price level.
A. Devaluation
B. Deflation
C. Inflation
D. Depreciation
Answer: Option B
602. It is a series of equal payments occurring at equal interval of time.
A. Annuity
B. Debt
C. Amortization
D. Deposit
Answer: Option A
603. The place where buyers and sellers come together.
A. Market
B. Business
C. Recreation center
D. Buy and sell section
Answer: Option A
604. A market whereby there is only one buyer of an item for which there are no goods substitute
A. Monopsony
B. Oligopoly
C. Monopoly
D. Oligopsony
Answer: Option A
605. It is a series of equal payments occurring at equal interval of time where the first payment is made after several periods, after
the beginning of the payment.
A. Perpetuity
B. Ordinary annuity
C. Annuity due
D. Deferred annuity
Answer: Option D
606. The total income equals the total operating cost.
A. Balanced sheet
B. In-place value
C. Check and balance
D. Break even – no gain no loss
Answer: Option D
607. Kind of obligation which has no condition attached.
A. Analytic
B. Pure
C. Gratuitous
D. Private
Answer: Option C
608. Direct labor costs incurred in the factory and direct material costs are the costs of all materials that go into production. The sum
of these two direct costs is known as:
A. GS and A expenses
B. Operating and maintenance costs
C. Prime cost
D. O and M costs
Answer: Option C
609. An index of short term paying ability is called:
A. Receivable turn-over
B. Profit margin ratio
C. Current ratio
D. Acid-test ratio
Answer: Option D
610. Artificial expenses that spread the purchase price of an asset or another property over a number of years.
A. Depreciation
B. Sinking fund
C. Amnesty
D. Bond
Answer: Option A
611. Estimated value at the end of the useful life.
A. Market value
B. Fair value
C. Salvage value
D. Book value
Answer: Option C
612. Consists of the actual counting or determination of the actual quantity of the materials on hand as of a given date.
A. Physical inventory
B. Material update
C. Technological assessment
D. Material count
Answer: Option A
613. Additional information of prospective bidders on contract documents issued prior to bidding date.
A. Delict
B. Escalatory
C. Technological assessment
D. Bid bulletin
Answer: Option D
614. A series of uniform accounts over an infinite period of time.
A. Depreciation
B. Annuity
C. Perpetuity
D. Inflation
Answer: Option C
615. 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
Answer: Option B
616. 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
Answer: Option C
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
Answer: Option B
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
Answer: Option C
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 = P600.00
The 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
Answer: Option A
620. 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
Answer: Option D
621. A man paid 10% down payment 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.
A. P42,821.86
B. P42,128.67
C. P42,218.57
D. P42,812.68
Answer: Option A
622. 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?
A. P7,654.04
B. P7,731.29
C. P7,420.89
D. P7,590.12
Answer: Option B
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
Answer: Option C
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
Answer: Option D
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
Answer: Option A
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
Answer: Option D
627. 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?
A. P10,834.38
B. P10,278.12
C. P10,450.00
D. P10,672.90
Answer: Option A
628. A person buys a piece of lot for P100,000 down payment 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?
A. P142,999.08
B. P143,104.89
C. P142,189.67
D. P143,999.08
Answer: Option D
629. How much must you invest today in order to withdraw P2,000 annually for 10 years if the interest rate is 9%?
A. P12,835.32
B. P12,992.22
C. P12,562.09
D. P12,004.59
Answer: Option A
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
Answer: Option C
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%
Answer: Option A
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
Answer: Option B
633. A house and lot can be acquired by a down payment 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
Answer: Option D
634. A parent on the day the child is born wishes to determine what lump sum would have to be paid into an account bearing interest at 5% compounded annually, in
order to withdraw P20,000 each on the child’s 18th, 19th, 20th and 21st birthdays. How much is the lump sum amount?

A. P30,119.73
B. P30,941.73
C. P30,149.37
D. P30,419.73
Answer: Option B
635. 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
Answer: Option D
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
Answer: Option A
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
Answer: Option A
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
Answer: Option D
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%
Answer: Option A
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
Answer: Option A
641. 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:
A. P13,100.60
B. P13,589.50
C. P13,982.80
D. P13,486.70
Answer: Option D
642. 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?
A. 24.2%
B. 24.8%
C. 25.1%
D. 25.4%
Answer: Option B
643. 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?
A. P1,298.00
B. P1,231.09
C. P1,221.62
D. P1,263.71
Answer: Option D
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
Answer: Option A
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
Answer: Option C
646. 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?
A. P13,841.34
B. P13,472.22
C. P13,286.63
D. P13,023.52
Answer: Option D
647. 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?
A. P3,702,939.73
B. P3,607,562.16
C. P3,799,801.23
D. P3,676,590.12
Answer: Option A
648. A man paid 10% down payment of P200,000 for a house and lot and agreed to pay the balance on monthly 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
Answer: Option C
649. 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
Answer: Option B
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
Answer: Option A
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
Answer: Option C
652. 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?

A. P3,345.77
B. P3,389.32
C. P3,489.11
D. P3,573.99
Answer: Option D
653. 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?
A. P838.86
B. P849.12
C. P850.12
D. P840.21
Answer: Option A
654. 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
Answer: Option B
655. A service car whose cash price was P540,000 was bought with a down payment 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%
Answer: Option B
656. 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?
A. P16,002.18
B. P15,890.12
C. P16,379.75
D. P15,980.12
Answer: Option C
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
Answer: Option A
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
Answer: Option B
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
Answer: Option D
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
Answer: Option C
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
Answer: Option A
662. 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?

A. 10
B. 11
C. 12
D. 13
Answer: Option A
663. 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?
A. P13,994.17
B. P14,801.12
C. P13,720.15
D. P14,078.78
Answer: Option A
664. 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
Answer: Option D
665. 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?

A. P100,357.37
B. P100,537.73
C. P100,375.37
D. P100,735.37
Answer: Option C
666. 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%?

A. P194,089.17
B. P195,780.12
C. P196,801.56
D. P197,008.25
Answer: Option D
667. 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 down payment 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?
A. P8,929.29
B. P8,225.00
C. P8,552.00
D. P8,008.20
Answer: Option B
668. 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 down payment 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?
A. P186,927.24
B. P188,225.00
C. P187,701.26
D. P185,900.20
Answer: Option A
669. 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?

A. P34,859.78
B. P35,890.12
C. P35,074.58
D. P34,074.85
Answer: Option C
670. A car dealer advertises the sale of a car model for a cash price of P280,000. If purchased on installment, the regular down payment 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
Answer: Option A
671. A machinery supplier is offering a certain machinery on a 10% down payment 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%
Answer: Option C
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
Answer: Option D
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
Answer: Option C
674. An employee is earning P12,000.00 a month and he can afford to purchase a car which will require a down payment 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 down payment 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
Answer: Option B
675. 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
Answer: Option B
676. 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
Answer: Option C
677. 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?
A. P2,775.50
B. P2,662.89
C. P2,590.04
D. P2,409.78
Answer: Option A
678. 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?
A. P99,490.00
B. P99,507.35
C. P99,601.71
D. P99,723.54
Answer: Option C
679. If a low cost house and lot worth P87,000 were offered at 10% down payment and P500 per month for 25 years, what is the
effective monthly interest rate on the diminishing balance?
A. 0.492%
B. 4.92%
C. 0.0492%
D. 49.2%
Answer: Option A
680. 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
Answer: Option B
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
Answer: Option C
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
Answer: Option A
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 down payment 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%
Answer: Option A
684. Engr. Bacolongan of Main Engineering decided to purchase a machine which is to be used for their refrigeration and
air-conditioning 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
Answer: Option B
685. Engr. Bacolongan of Main Engineering decided to purchase a machine which is to be used for their refrigeration and
air-conditioning 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. If money is worth 6% per annum, determine the annual deposit.

A. P367,890.12
B. P366,062.33
C. P365,089.34
D. P364,890.43
Answer: Option B
686. Because of the peso devaluation, a car costing P150,000 is to be purchased through a finance company instead of paying cash. If the buyer is required to pay
P40,000 as down payment and P4,000 each month for 4 years, what is the effective interest rate on the diminishing balance?

A. 35.28%
B. 35.82%
C. 34.89%
D. 34.29%
Answer: Option A
687. Engr. Edwin Astorga plans to purchase a new office building costing P1,000,000. He can raise the building by issuing 10%, 20-year bond that would pay P150,000
interest per year and repay the face amount at maturity. Instead of buying the new building, he can least it for P140,000 per year, first payment being due one year from
now. The building has an expected life of 20 years.
Ignoring effects on income tax, what is the difference between buying the building and leasing the building?

A. P233,779.27
B. P233,070.12
C. P234,070.34
D. P234,560.12
Answer: Option A
688. Triple J Construction Firm had put up for sale of some of their heavy equipment for construction works. There were two
interested buyers submitting their respective bids for the heavy equipment. The bids are as follows:
Buyer A offers P10,000,000 payable 20% down payment, the balance payable P1,000,000 annually for 8 years. Buyer B offers
P9,000,000 payable P2,000,000 down payment, the balance payable P500,000 semi-annually for 7 years.
How much is the difference between the two bids if money is worth 10% effective?
A. P346,520.05
B. P346,980.12
C. P347,019.45
D. P347,733.29
Answer: Option D
689. Froyd Review & Training Center Inc. is expanding its school facilities starting 2001. The program requires the following
estimated expenditures:
P1,000,000 at the end of 2001
P1,200,000 at the end of 2002
P1,500,000 at the end of 2003
To accumulate the required funds, it establish a sinking fund constituting of 15 uniform annual deposits, the first deposit has been
made at the end of 1992. The interest rate of the fund is 2% per annum. Calculate the annual deposit.
A. P217,520.05
B. P216,980.12
C. P217,679.01
D. P216,733.29
Answer: Option C
690. Froyd Review & Training Center Inc. is expanding its school facilities starting 2001. The program requires the following
estimated expenditures:
P1,000,000 at the end of 2001
P1,200,000 at the end of 2002
P1,500,000 at the end of 2003
To accumulate the required funds, it establish a sinking fund constituting of 15 uniform annual deposits, the first deposit has been
made at the end of 1992. The interest rate of the fund is 2% per annum. Calculate the balance in the fund on January 1, 2002.
A. P2,185,902.11
B. P2,195,600.03
C. P2,165,399.54
D. P2,175,380.00
Answer: Option B
691. Padilla Pawnshop sells jewelries on either of the following arrangements:
Cash Price: Discount of 10% of the marked price
Installment: Down payment of 20% of the marked price and the balance payable in equal annual installments for the next 4 years.
If you are buying a necklace with a marked price of P5,000, how much is the difference between buying in cash and buying in
installment? Assume that money is worth 5%.
A. P40.76
B. P41.90
C. P43.54
D. P45.95
Answer: Option D
692. Lim Bon Fing Y Hermanos Inc has offered for sale its two-storey building in the commercial district of Cebu City. The building
contains two stores on the ground floor and a number of offices on the second floor.
A prospective buyer estimates that if he buys this property, he will hold it for about 10 years. He estimates that the average receipts from the rental during this period to be
P350,000.00 and the average expenses for all purpose in connection with its ownership and operation (maintenance and repairs, janitorial services, insurance, etc.) to be
P135,000.00. He believes that the property can be sold for a net of P2,000,000 at the end of the 10th year. If the rate of return on this type of investment is 7%, determine
the cash price of this property for the buyer to recover his investment with a 7% return before income taxes.

A. P2,526,768.61
B. P2,490,156.34
C. P2,390,189.00
D. P2,230,120.56
Answer: Option A
693. Bicol Hardware Inc is considering two alternative strategies for a new power tool. According to Jun Ramos who is introducing the power tool, the new product will
require an outlay of P30,000 with a low price strategy. The product will generate cash proceeds of P20,000 per year and will have a life to two years. With a high price
strategy, the product will generate cash proceeds of P36,000 but will have a life of only one year. The cost of money for the company is 10%. Determine the net present
value of the low price strategy.

A. P34,389.12
B. P34,490.10
C. P34,518.89
D. P34,710.74
Answer: Option D
694. Bicol Hardware Inc is considering two alternative strategies for a new power tool. According to Jun Ramos who is introducing the power tool, the new product will
require an outlay of P30,000 with a low price strategy. The product will generate cash proceeds of P20,000 per year and will have a life to two years. With a high price
strategy, the product will generate cash proceeds of P36,000 but will have a life of only one year. The cost of money for the company is 10%. Determine the net present
value of the high price strategy.

A. P32,727.27
B. P33,737.34
C. P33,747.20
D. P33,757.89
Answer: Option A
695. John Smith plans to purchase a new house costing P1,000,000. He can raise the building by issuing a 10%, 20 year old bond that would pay P150,000 interest per
year and repay the face amount at maturity. Instead of buying the new house, Jan Michael has an option of leasing it for P140,000 per year, the first payment due one year
from now. The building has an expected life of 20 years. If interest charge for leasing is 12%, which of the following is true?

A. Lease is more economical than borrow and buy.

B. Lease has same result with borrow and buy.
C. Borrow and buy is half the value than lease.
D. Borrow and buy is economical by almost a hundred thousand than lease.
Answer: Option D
696. Engr. Edward Zuela is considering establishing his own business. An investment of P100,000 will be required which must be
recovered in 15 years. It is estimated that sales will be P150,000 per year and that annual operating expenses will be as follows:
Materials P40,000 Labor P70,000
Overhead P10,000 + 10% of sales Selling expenses P5,000
Engr. Zuela will give up his regular job paying P15,000 per year and devote full time to the operation of the business. This will result in decreasing labor cost by P10,000
per year, material cost by P7,000 per year and overhead cost by P8,000 per year. If he expects to earn at least 20% of his capital, is investing in this business a sound idea?

A. Yes, it is a sound idea

B. No, it is not a sound idea
C. Neither yes nor no because it simply breakeven
D. It depends on the current demand of the market.
Answer: Option B
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
Answer: Option B
698. 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
Answer: Option A
699. A father wishes to provide P40,000 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 semi-annually, 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
Answer: Option D
700. A group of Filipino Mechanical Engineers formed a corporation and the opportunity to invest P8,000,000 in either of the two situations. The first is to expand a
domestic operation. It is estimated that this investment would return a net year end cash flow of P2,000,000 each year for 10 years and at the end of that time, the physical
assets, which would no longer be needed, could be sold at P5,000,000. The alternative opportunity would involve building and operating a plant in a foreign country. This
operation would involve no net cash flow during the first 3 years, but it is believed that, beginning with the end of the fourth year, an annual flow of

P4,000,000 would be received, running through the end of the 10th year. After that time, it is believed that the operation and facilities
might be expropriated, with little, if any, compensation, being paid. Which of the following is true?
A. Foreign operation yields bigger rate of return.
B. Domestic and foreign operations yield the same rate of return.
C. Domestic operation has double the rate of return of the foreign operation.
D. Foreign operation yields approximately 3% less rate of return than domestic operation.
Answer: Option D
701. 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
Answer: Option A
702. 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 %?

A. P51,843.90
B. P51,346.58
C. P52,002.45
D. P52,740.20
Answer: Option B
703. NSN Builders plans to construct an additional building at the end of 10 years for an estimated cost of P5,000,000.00. To accumulate the amount, it will have equal
year end deposits in a fund earning 13%. However, at the end of the 5th year, it was decided to have a larger building that originally intended to an estimated cost of
P8,000,000.00. What should be the annual deposit for the last 5 years?

A. P734,391.48
B. P742,890.10
C. P738,900.45
D. P740,010.86
Answer: Option A
704. The quantity of a certain commodity that is offered for sale at a certain price at a given place and time.
A. Demand
B. Supply
C. Stocks
D. Goods
Answer: Option B
705. Work-in process is classified as:
A. An asset
B. A liability
C. An expenses
D. An owner’s equity
Answer: Option A
706. What is the highest position in the corporation?
A. President
B. Board of Directors
C. Chairman of the Board
D. Stockholders
Answer: Option C
707. Type of ownership in business where individuals exercise and enjoy the right in their own interest.
A. Equitable
B. Public
C. Private
D. Pure
Answer: Option C
708. Decrease in the value of a physical property due to the passage of time.
A. Inflation
B. Depletion
C. Recession
D. Depreciation
Answer: Option D
709. An association of two or more individuals for the purpose of operating a business as co-owners for profit.
A. Sole proprietorship
B. Company
C. Partnership
D. Corporation
Answer: Option C
710. We may classify an interest rate, which specifies the actual rate of interest on the principal for one year as:
A. Nominal rate
B. Rate of return
C. Exact interest rate
D. Effective rate
Answer: Option D
711. It is defined to be the capacity of a commodity to satisfy human want.
A. Discount
B. Luxury
C. Necessity
D. Utility
Answer: Option B
712. It is the amount which a willing buyer will pay to a willing seller for a property where each has equal advantage and is under no
compulsion to buy or sell.
A. Fair value
B. Market value
C. Book value
D. Salvage value
Answer: Option B
713. This occurs in a situation where a commodity or service is supplied by a number of vendors and there is nothing to prevent
additional vendors entering the market.
A. Perfect competition
B. Oligopoly
C. Monopoly
D. Elastic demand
Answer: Option A
714. These are products or services that are desired by human and will be purchased if money is available after the required
necessities have been obtained.
A. Utilities
B. Necessities
C. Luxuries
D. Products, goods and services
Answer: Option C
715. These are products or services that are required to support human life and activities, that will be purchased in somewhat the
same quantity even though the price varies considerably.
A. Utilities
B. Necessities
C. Luxuries
D. Products, goods and services
Answer: Option B
716. A condition where only few individuals produce a certain product and that any action of one will lead to almost the same action
of the others.
A. Oligopoly
B. Semi-monopoly
C. Monopoly
D. Perfect competition
Answer: Option A
717. Grand total of the assets and operational capability of a corporation.
A. Authorized capital
B. Investment
C. Subscribed capital
D. Money market
Answer: Option A
718. The worth of the property equals to the original cost less depreciation.
A. Scrap value
B. Face value
C. Market value
D. Book value
Answer: Option D
719. Money paid for the use of borrowed capital.
A. Discount
B. Credit
C. Interest
D. Profit
Answer: Option C
720. Liquid assets such as cash, and other assets that can be converted quickly into cash, such as accounts receivable and
merchandise are called:
A. Total assets
B. Fixed assets
C. Current assets
D. None of these
Answer: Option C
721. The length of time which the property may be considered at a profit.
A. Physical life
B. Economic life
C. Operating life
D. All of these
Answer: Option B
722. The provision in the contract that indicates the possible adjustment of material cost and labor cost.
A. Secondary cause
B. Escalatory clause
C. Contingency clause
D. Main clause
Answer: Option B
723. The present worth of all depreciation over the economic life of the item is called
A. Book value
B. Capital recovery
C. Depreciation recovery
D. Sinking fund
Answer: Option C
724. Gross profit, sales less cost of goods sold, as a percentage of sales is called:
A. Profit margin
B. Gross margin
C. Net income
D. Rate of return
Answer: Option B
725. Worth of the property as shown in the accounting records of an enterprise.
A. Fair value
B. Market value
C. Salvage value
D. Book value
Answer: Option D
726. Those funds that are required to make the enterprise or project a going concern.
A. Initial investment
B. Current accounts
C. Working capital
D. Subscribed capital
Answer: Option C
727. A market situation where there is only one seller with many buyer.
A. Monopoly
B. Monopsony
C. Oligopoly
D. Oligopsony
Answer: Option A
728. A market situation where there are few sellers and few buyers.
A. Oligopoly
B. Oligopsony
C. Bilateral oligopoly
D. Bilateral oligopsony
Answer: Option C
729. A market situation where there is one seller and one buyer.
A. Monopoly
B. Monopsony
C. Bilateral monopoly
D. Bilateral monopsony
Answer: Option C
730. A market situation where there are only two buyers with many sellers.
A. Duopoly
B. Oligopoly
C. Duopsony
D. Oligopsony
Answer: Option C
731. The cumulative effect of elapsed time on the money value of an event, based on the earning power of equivalent invested
funds capital should or will learn.
A. Present worth factor
B. Interest rate
C. Time value of money
D. Yield
Answer: Option C
732. Defined as the future value minus the present value.
A. Interest
B. Rate of return
C. Discount
D. Capital
Answer: Option C
733. The flow back of profit plus depreciation from a given project is called:
A. Capital recovery
B. Cash flow
C. Economic return
D. Earning value
Answer: Option B
734. 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
Answer: Option B
735. 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
Answer: Option C
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
Answer: Option B
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
Answer: Option B
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
Answer: Option D
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
ased stock of San Miguel Corporation at a total cost of P144,000. She then

d her stock, receiving P152,000 after deduction of brokerage fees. What semiannual

uld like to invest it in business. His estimates of the year-by-year receipts and
abulation below:

ge value of P2,000 at the end of useful life. Find the rate of return of the

equivalent to a 10% effective rate?

a piece of land and to build a school building on this land. However, since the school building is not an immediate
t should purchase this land and build the building now or defer this action for 3 years. The current costs are as follows:

school building are expected to appreciate at the rate of 15% and 4% per annum,
d and structure 3 years hence?

amounts:

iquidate the debts at the present time. If the two parties agree on a 5% interest rate,

es planned of returning to the Philippines at the end of 2001. He established a fund

sits and withdrawals.
ounded semiannually until the end of 1997. At that date, the interest was
hat will be the principal in the fund at the end of 2001?

g a labor-saving printing equipment. It has a choice between two different models.

l cost P1,452,000. The anticipated repair costs for each model are as follows:

he publisher is earning a 7% return of its capital, which model should be

the publisher will purchase the more economical model?

single payment compound amount factor of this investment is 1.23%

amount factor of 1.32 if invested for “n” years. If the interest rate is 4.73% per

ral years later, it becomes P60,000. What is the single payment present worth
sted for 5 years, what is the rate of interest?

which the interest is compounded continuously. If the balance doubles in 6 years,

ned an account at Bank of Philippine Islands with an initial deposit of P1,000,000.00. On March 1, 2000, she opened an
nterest compounded monthly, how much will be in the account on April 1, 2000?

nk which forms part of the country’s money supply.

d output usually accompanied by the fall in the general price level.

equal interval of time.

gether.

f an item for which there are no goods substitute

equal interval of time where the first payment is made after several periods, after

ost.

tached.

d direct material costs are the costs of all materials that go into production. The sum

d:
price of an asset or another property over a number of years.

ion of the actual quantity of the materials on hand as of a given date.

rs on contract documents issued prior to bidding date.

period of time.

starting at the end of the third year and continuing to the end of the fourth year, if

e paid in 10 equal payments for 10 quarters. If the interest rate is 10%

is P2,000, how much did he borrow?

uate with a future amount of P20,000? Assume i = 6% annually.

t of P10,000 payable for 6 years at 12% interest annually.

sum of money to provide funds to cover the yearly operating expenses and the cost of replacing every year the dyes of a
s model changes for a period of 10 years.
t which earns 6% interest. Determine the sum of money that must be provided,

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
cancel the debt for principal and interest. What is the annual payment?

0 for a house and lot and agreed to pay the 90% balance on monthly installment for
monthly. Compute the amount of the monthly payment.

y paying P3,000.00 at the end of each year, with interest at 8% compounded

r annuity paying P6,000 at the end of each year, with interest at 15% compounded

unded semi-annually is to be amortized by semi-annual payment over the next 5

emi-annual payment.

nstitution which will be paid after 10 years at an interest rate of 12% compounded annually. If money is worth 8% per
onthly in order to discharge his debt 10 yrs. hence?

erest at 5% compounded annually. He agrees to pay his obligations by paying 8

end of 10 years. Find the annual payments.
ual payments at the end of 6 quarters. If the interest is 12% compounded quarterly,
ment is P2,000.00?

own payment and 10 deferred semi-annual payments of P8,000 each, starting three
investment if the rate of interest is 12% compounded semi-annually?

withdraw P2,000 annually for 10 years if the interest rate is 9%?

ar beginning on January 1, year 1, in order to accumulate P5,000 on the date of

,000 cash or for P2,000 down and payments of P750 per year for 15 years. What is

ce value each, redeemable at par at the end of 15 years to accumulate the funds required for redemption. The firm
posits, the interest rate of the fund being 4%. What was the principal in the fund at the end of the 12th year?

payment 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
y is worth 14% compounded annually, what is the cash price of the property?

to determine what lump sum would have to be paid into an account bearing interest at 5% compounded annually, in
th, 19th, 20th and 21st birthdays. How much is the lump sum amount?
 ear and want an account that will pay him P25,000 a year for the next 15 years. Assuming a 6% annual effective interest
now? (The fund will be depleted after 15 years).

0 employees a holiday bonus. How much is needed to invest monthly for a year at
so that each employee will receive a P2,000 bonus?

P100,000 worth of land. The interest rate is 12% nominal and payable in 20 years.

interest and paid P2,000 per annum for the last 4 years. What does he have to
his loan?

nd is equivalent to payments of P200,000 each year for 3 years. What is the annual

00 for 2 years, P40,000 at the end of 4 years and P80,000 at the end of 8 years.
aside for this equipment. Money worth 10% compounded annually.

of his 5 years old son, P500 at the end of each month for 10 years at 12% annual
will be available in two years is:

00, a salvage value of P2,000 and a life of 10 years. If your cost of operation per
00, what is the approximate rate of return (ROR) on the investment?

P300.00 at the end of each year for 5 years. One year prior to the receipt of the
interest rate is 6%, what proceeds will he obtain?
 wishes to give each of 50 employees a holiday bonus. How much is needed to
mpounded monthly, so that each employee will receive a P1,000.00 bonus?

d of each month for 10 years at 12% annual interest, compounded monthly. What
s?

go. The terms of the loan are 10% interest for 10 years with uniform payments. He
principal does he still owe?

00,000 every end of 3 months for 10 years. However, he may choose to get a
ow much is this lump sum of the cost of money is 14% compounded quarterly?

0 for a house and lot and agreed to pay the balance on monthly installments for “x”
thly. If the monthly installment was P42,821.87, find the value of x?

o to college. Your father invested P5,000 in 7% account for your education when you were born. If you withdraw
h birthday, how much will be left in the account at the end of the 21st year?

ve annual interest. He must pay back the loan over 30 years with uniform monthly
at does Mr. Ayala pay each month?

ment. The cost of the machine is P25,000.00. Each year it operates, the machine will generate a savings of P15,000.00.
what is the discounted payback period, in years, on the investment of the machine?
n estimated scrap value of P2,000.00 after 8 years. Inflation is 2% per year. The effective annual interest rate earned on
o be set aside each year to replace the machine with an identical model 8 years from now?

ffective annual interest. He must pay back the loan over 30 years with uniform
nth. What does Engr. Santos pay each month?

t for office space at the beginning of each year for the next 10 years, an engineering firm has decided to take out a 10-
interest. The firm will invest P100,000.00 of the rent saved and earn 18% annual interest on that amount. What will be
and expenses?

0 was bought with a down payment of P162,000 and monthly installment of

rest if compounded 5monthly?

osited each year in order to accumulate P100,000.00 at the end of the 5th annual

for a building renovation. In order to generate this sum, a sinking fund consisting of three annual payments is established
e made after three years. What payments are necessary if money worth 15% per annum?

ty of P15,000 payable semi-annually if money is worth 8% compounded quarterly.

r for 6 years, at an annual interest rate of 7%, what is the total peso amount
 der to withdraw P1,000.00 per year for 10 years if the interest rate is 12%?

00 for a house and lot and agreed to pay the balance on monthly installments for 5
thly. What was the monthly installment in pesos?

00,000.00 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
mpounded quarterly, what is the value of x?

% compounded annually in order to build a house, how much must you pay monthly

ial Security System, in the form of calamity loan, with interest at 8% compounded
for 10 years. Find the quarterly payments.

ent, the company has offered a supervisor a yearly gratuity pay of P20,000.00 for 10 years with the first payment to be
r, instead, requested that he be paid a lump sum on the date of his retirement less interact that the company would have
asis. If interest is 15%, what is the equivalently lump sum that he could get?

business after 10 years, a fabrication company purchased an adjacent lot for its expansion program where it hopes to put
en it will be constructed 10 years after, To provide the required capital expense, it plans to put up a sinking fund for the
ach year if interest to be earned is computed at 15%?

P350,000. He was able to negotiate with the seller to allow him to pay only a down payment of 20% and the balance
at 1.5% interest per month. Once the day he paid the 20th installment, he decided to pay monthly payment. How much is
P350,000. He was able to negotiate with the seller to allow him to pay only a down payment of 20% and the balance
at 1.5% interest per month. Once the day he paid the 20th installment, he decided to pay monthly payment. What is the

00,000.00 a machine which is estimated to have a salvage value of P50,000.00 at the end of its 10 years economic life.
osit in a sinking fund that will pay 18% interest, compounded yearly, to accumulate the needed fund to purchase the new
of the machine it purchased if a new machine will cost 75% more by that time?

el for a cash price of P280,000. If purchased on installment, the regular down payment is 15% and balance payable in 18
.5% per month. How much will be required monthly payments?

achinery on a 10% down payment and the balance payable in equal end of the year payments without interest for 2 years.
P250,000. However, for cash purchase, the machine would only cost P195,000. What is the equivalent interest rate that
erest is compounded quarterly?

x senior officers in which the company will shoulder 25% of the cost and the difference payable by each officer to a
installments at an interest rate of 1.5% per month. If the cost of each car is P350,000, determine the amount each officer

, how much annuity can a person get annually from the bank every year for 8
Cost of money is 14%.

and he can afford to purchase a car which will require a down payment of P10,000.00 and a monthly amortization of not
d be the maximum cash value of a car he can purchase if the seller will agree to a down payment of P10,000.00 and the
yable on monthly basis? The first payment will be due at the end of the first month?
 ich the employees will be allowed to purchase shares of stocks of the company at the end of its fifth year of operation,
lity already. The stock has a par value of P100.00 per share.

n employee decided to save in a bank the amount of P8,000.00 at the end of every
nded annually.
chase at the end of the fifth year of his yearly deposits?

% compounded annually, agreeing to repay the loan in twenty equal annual

still unpaid after he has made the tenth payment?

ompounded quarterly is to be amortized by equal semi-annual payments over the

much is the semi-annual payments?

rovide annual scholarships to deserving CE students. The fund will grant P5,000 for each of the first five years, P8,000
eafter. The scholarship will start one year after the fund is established. If the fund earns 8% interest, what is the amount

ere offered at 10% down payment and P500 per month for 25 years, what is the
balance?

by floods at Dona Rosario Village located along Butuanon river is estimated at P700,000. To build a gravity dam to
00,000 and would involve an annual maintenance cost of P20,000. With interest at 8% compounded annually, how many

bank at 12% interest, and paid P2,000.00 per annum for the first 4 years. What
pay-off the loan?

is borrowing from a development bank in six annual end-of-the-year payments of P71,477.70. Interest is 18% per
he yearly amount he will be paying the bank. How much money Engr. Narito is borrowing from the bank?
 ned colored TV at Bodega Appliance Center an amount of P20,000.00. She made a down payment of P5,000.00 and the
. If financing charge is 12% for each year computed on the total balance to be paid by installment and interest rate 12%,
olored TV? What will be the actual cost of the money?

ded to purchase a machine which is to be used for their refrigeration and

00. The useful life of the machine is estimated to be 5 years with a salvage value of P80,000 as based on current prices.
xt 5 years will be 7%. The machine will be replaced with a duplicate and the firm will accumulate the necessary capital
e fund that earns 6% per annum. Determine the annual deposit.

ded to purchase a machine which is to be used for their refrigeration and

00. The useful life of the machine is estimated to be 5 years with a salvage value of P80,000 as based on current prices.
xt 5 years will be 7%. The machine will be replaced with a duplicate and the firm will accumulate the necessary capital
e fund. If money is worth 6% per annum, determine the annual deposit.

ng P150,000 is to be purchased through a finance company instead of paying cash. If the buyer is required to pay
h for 4 years, what is the effective interest rate on the diminishing balance?

w office building costing P1,000,000. He can raise the building by issuing 10%, 20-year bond that would pay P150,000
turity. Instead of buying the new building, he can least it for P140,000 per year, first payment being due one year from
s.
ence between buying the building and leasing the building?

e of some of their heavy equipment for construction works. There were two
for the heavy equipment. The bids are as follows:
payment, the balance payable P1,000,000 annually for 8 years. Buyer B offers
he balance payable P500,000 semi-annually for 7 years.
if money is worth 10% effective?

anding its school facilities starting 2001. The program requires the following
 nking fund constituting of 15 uniform annual deposits, the first deposit has been
und is 2% per annum. Calculate the annual deposit.

anding its school facilities starting 2001. The program requires the following

nking fund constituting of 15 uniform annual deposits, the first deposit has been
und is 2% per annum. Calculate the balance in the fund on January 1, 2002.

the following arrangements:

d price and the balance payable in equal annual installments for the next 4 years.
of P5,000, how much is the difference between buying in cash and buying in

or sale its two-storey building in the commercial district of Cebu City. The building
mber of offices on the second floor.
property, he will hold it for about 10 years. He estimates that the average receipts from the rental during this period to be
pose in connection with its ownership and operation (maintenance and repairs, janitorial services, insurance, etc.) to be
e sold for a net of P2,000,000 at the end of the 10th year. If the rate of return on this type of investment is 7%, determine
over his investment with a 7% return before income taxes.

native strategies for a new power tool. According to Jun Ramos who is introducing the power tool, the new product will
tegy. The product will generate cash proceeds of P20,000 per year and will have a life to two years. With a high price
of P36,000 but will have a life of only one year. The cost of money for the company is 10%. Determine the net present

native strategies for a new power tool. According to Jun Ramos who is introducing the power tool, the new product will
tegy. The product will generate cash proceeds of P20,000 per year and will have a life to two years. With a high price
of P36,000 but will have a life of only one year. The cost of money for the company is 10%. Determine the net present
osting P1,000,000. He can raise the building by issuing a 10%, 20 year old bond that would pay P150,000 interest per
ad of buying the new house, Jan Michael has an option of leasing it for P140,000 per year, the first payment due one year
0 years. If interest charge for leasing is 12%, which of the following is true?

y.

ndred thousand than lease.

ing his own business. An investment of P100,000 will be required which must be
ll be P150,000 per year and that annual operating expenses will be as follows:

es P5,000
15,000 per year and devote full time to the operation of the business. This will result in decreasing labor cost by P10,000
erhead cost by P8,000 per year. If he expects to earn at least 20% of his capital, is investing in this business a sound idea?

n
t.

achine costing P12,000 if paid in cash. However, she can purchase it on installment basis to be paid within 5 years. If
s her yearly amortization if all payments are to be made at the beginning of each year?

0.00 to meet college expenses during his senior year. He promised to repay the loan with interest at 4.5% in 10 equal
made 3 years after the date of the loan. How much will this payment be?

on on his son’s 21st birthday. How much should he deposit every 6 months in a
mi-annually, if the first deposit was made when the son was 3 ½ years old?

ormed a corporation and the opportunity to invest P8,000,000 in either of the two situations. The first is to expand a
ment would return a net year end cash flow of P2,000,000 each year for 10 years and at the end of that time, the physical
e sold at P5,000,000. The alternative opportunity would involve building and operating a plant in a foreign country. This
the first 3 years, but it is believed that, beginning with the end of the fourth year, an annual flow of

he end of the 10th year. After that time, it is believed that the operation and facilities
sation, being paid. Which of the following is true?

e rate of return.
rn of the foreign operation.
ss rate of return than domestic operation.

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
the principal and interest at 7% compounded annually. Find the annual payment which must be made for 6 years.

pment and facilities as paid 5 years in advance, with option to renew the rent for another years by payment of P15,000
period. Now, the lessor asks the lessee if it could be possible to prepay the rental that will be paid annually in the
r the request, what would be the fair prepayment to be made to the lessor if interest is now figured at 8 %?

al building at the end of 10 years for an estimated cost of P5,000,000.00. To accumulate the amount, it will have equal
er, at the end of the 5th year, it was decided to have a larger building that originally intended to an estimated cost of
t for the last 5 years?

offered for sale at a certain price at a given place and time.

on?

duals exercise and enjoy the right in their own interest.

due to the passage of time.

r the purpose of operating a business as co-owners for profit.

ifies the actual rate of interest on the principal for one year as:

ty to satisfy human want.

ay to a willing seller for a property where each has equal advantage and is under no

y or service is supplied by a number of vendors and there is nothing to prevent

ed by human and will be purchased if money is available after the required

red to support human life and activities, that will be purchased in somewhat the
derably.

duce a certain product and that any action of one will lead to almost the same action

ability of a corporation.

nal cost less depreciation.

hat can be converted quickly into cash, such as accounts receivable and

be considered at a profit.

he possible adjustment of material cost and labor cost.

e economic life of the item is called

a percentage of sales is called:

nting records of an enterprise.

terprise or project a going concern.

eller with many buyer.

rs and few buyers.

and one buyer.

buyers with many sellers.

money value of an event, based on the earning power of equivalent invested

t value.

m a given project is called:

00, P1,500 and P2,000 are made at the end of the 2nd year, 3rd year and 4th year,
equivalent present worth of the investment?

P2,000 at the end of the 2nd year, 3rd year and 4th year, respectively in a savings
h is in the account at the end of the 4th year?

2,000 at the end of the 2nd year, 3rd year and 4th year, respectively in a savings
he equivalent uniform deposit for the uniform gradient only?

radient series of P5,000 on the first years, P4,500 on the second year, P4,000 on
t is the equivalent present worth of the debt if interest is 5%?
radient series of P5,000 on the first year, P4,500 on the second year, P4,000 on the
uture amount of the amortization if interest is 5%.

radient series of P5,000 on the first year, P4,500 on the second year, P4,000 on the
equivalent uniform periodic payment if interest is 5%?
 C. P4,259.68
D. P4,325.12
Answer: Option A
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 Bulls’ 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 Lakers’
D. Chicago Bulls’ offer is over $150,000 per year than that of LA Lakers’
Answer: Option D
741. John Grisham, author of the best-selling novel “The Chamber” sold its copyright to Warner Bros. for the rights to make it into a
motion picture. Mr. Grisham’s has options between the following Warner Bros. proposals:
A. An immediate lump sum payment of $5,000,000.
B. An initial payment of $2,500,000 plus 4% of the movie’s gross receipts for the next 5 years which is forecasted as follows:
End of year Gross receipt 4% of Gross Receipt
1 $10,000,000.00 $400,000.00
2 $8,000,000.00 $320,000.00
3 $6,000,000.00 $240,000.00
4 $4,000,000.00 $160,000.00
5 $2,000,000.00 $80,000.00
If money is worth 10% and Mr. Grisham will not receive any royalty after the fifth year of exhibition of the movie, by how much is
proposal A bigger than proposal B?
A. P1,532,630
B. P1,390,090
C. P1,478,100
D. P1,289,450
Answer: Option A
742. 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
Answer: Option D
743. 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
Answer: Option B
744. 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%?
A. P105,712.33
B. P106,101.37
C. P107,490.12
D. P108,890.11
Answer: Option B
745. The profit derived from a project or business enterprise without consideration of obligations to financial contributors or claims of
other based on profit.
A. Economic return
B. Yield
C. Earning value
D. Expected yield
Answer: Option A
746. The payment for the use of borrowed money is called:
A. Loan
B. Maturity value
C. Interest
D. Principal
Answer: Option C
747. The interest rate at which the present work of the cash flow on a project is zero of the interest earned by an investment.
A. Effective rate
B. Nominal rate
C. Rate of return
D. Yield
Answer: Option C
748. The ratio of the interest payment to the principal for a given unit of time and usually expressed as a percentage of the principal.
A. Interest
B. Interest rate
C. Investment
D. All of these
Answer: Option B
749. The true value of interest rate computed by equations for compound interest for a 1 year period is known as:
A. Expected return
B. Interest
C. Nominal interest
D. Effective interest
Answer: Option D
750. The intangible item of value from the exclusive right of a company to provide a specific product or service in a stated region of
the country.
A. Market value
B. Book value
C. Goodwill value
D. Franchise value
Answer: Option D
751. The recorded current value of an asset is known as:
A. Scrap value
B. Salvage value
C. Book value
D. Present worth
Answer: Option C
752. Scrap value of an asset is sometimes known as:
A. Book value
B. Salvage value
C. Replacement value
D. Future value
Answer: Option B
753. What is sometimes called second-hand value?
A. Scrap value
B. Salvage value
C. Book value
D. Going value
Answer: Option B
754. An intangible value which is actually operating concern has due to its operation.
A. Book value
B. Fair value
C. Goodwill value
D. Going value
Answer: Option D
755. 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. P37,002.54
B. P37,520.34
C. P38,010.23
D. P38,782.34
Answer: Option B
756. A local firm is establishing a sinking fund for the purpose of accumulating a sufficient capital to retire its outstanding bonds at maturity. The bonds are redeemable in
10 years and their maturity value is P150,000.00. How much should be deposited each year if the fund pays interest at the rate of 3%?

A. P13,084.58
B. P13,048.85
C. P13,408.58
D. P13,480.58
Answer: Option A
757. A P1,000,000 issue of 3%, 15-year bond was sold at 95%. What is the rate of interest of this investment?
A. 3.0%
B. 3.4%
C. 3.7%
D. 4.0%
Answer: Option A
758. A man was offered a Land Bank certificate with a face value of P100,000 which is bearing interest of 6% per year payable
semiannually and due in 6 years. If he wants to earn 8% semiannually, how much must he pay the certificate?
A. P90,123.09
B. P90,614.93
C. P90,590.12
D. P90,333.25
Answer: Option B
759. A P1,000 bond which will mature in 10 years and with a bond rate of 8% payable annually is to be redeemed at par at the end
of this period. It is sold at P1,030. Determine the yield at this price.
A. 7.56%
B. 7.65%
C. 7.75%
D. 7.86%
Answer: Option A
760. You purchase a bond at P5,100. The bond pays P200 per year. It is redeemable for P5,050 at the end of 10 years. What is the
net rate of interest on your investment?
A. 3.56%
B. 3.85%
C. 3.75%
D. 3.68%
Answer: Option B
761. A P1,000, 6% bond pays dividend semiannually and will be redeemed at 110% on June 21, 2004. It is bought on June 21, 2001
to yield 4% interest. Find the price of the bond.
A. P1,122.70
B. P1,144.81
C. P1,133.78
D. P1,155.06
Answer: Option B
762. The value which a disinterested third party, different from the buyer and seller, will determine in order to establish a price
acceptable to both parties.
A. Market value
B. Goodwill value
C. Fair value
D. Franchise value
Answer: Option C
763. A type of annuity where the payments are made at the end of each payment period starting from the first period.
A. Ordinary annuity
B. Annuity due
C. Deferred annuity
D. Perpetuity
Answer: Option A
764. 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. Deferred annuity
B. Delayed annuity
C. Progressive annuity
D. Simple annuity
Answer: Option A
765. A type of annuity where the payments are made at the start of each period, beginning from the first period.
A. Ordinary annuity
B. Annuity due
C. Deferred annuity
D. Perpetuity
Answer: Option B
766. Which is NOT an essential element of an ordinary annuity?
A. The amounts of all payments are equal.
B. The payments are made at equal interval of time.
C. The first payment is made at the beginning of each period.
D. Compound interest is paid on all amounts in the annuity.
Answer: Option C
767. A is a periodic payment and I is the interest rate, then present worth of a perpetuity =
A. Ai
B. Ain
C. An/i
D. A/i
Answer: Option D
768. A mathematical expression also known as the present value of an annuity of 1 is called
A. Load factor
B. Demand factor
C. Sinking fund factor
D. Present worth factor
Answer: Option D
769. As applied to a capitalized asset, the distribution of the initial cost by a periodic changes to operation as in depreciation or the
reduction of a debt by either periodic or irregular prearranged program is called
A. Annuity
B. Capital recovery
C. Annuity factor
D. Amortization
Answer: Option D
770. The reduction of the value of an asset due to constant use and passage of time.
A. Scrap value
B. Depletion
C. Depreciation
D. Book value
Answer: Option C
771. A method of computing depreciation in which the annual charge is a fixed percentage of the depreciated book value at the
beginning of the year which the depreciation applies.
A. Straight line method
B. Sinking fund method
C. SYD method
D. Declining balance method
Answer: Option D
772. A VOM has a selling price of P400. If its selling price is expected to decline at a rate of 10% per annum due to obsolescence,
what will be its selling price after 5 years?
A. P222.67
B. P212.90
C. P236.20
D. P231.56
Answer: Option C
773. A machine costs P8,000 and an estimated life of 10 years with a salvage value of P500. What is its book value after 8 years
using straight line method?
A. P2,000.00
B. P2,100.00
C. P2,200.00
D. P2,300.00
Answer: Option A
774. A telephone company purchased a microwave radio equipment for P6 million, freight and installation charges amounted to 4% of the purchased price. If the
equipment will be depreciated over a period of 10 years with a salvage value of 8%, determine the depreciation cost during the 5th year using SYD.

A. P626,269.09
B. P623,209.09
C. P625,129.09
D. P624,069.89
Answer: Option A
775. ABC Corporation makes it a policy that for any new equipment purchased, the annual depreciation cost should not exceed 20% of the first cost at any time with no
salvage value. Determine the length of service life necessary if the depreciation used is the SYD method.

A. 7 years
B. 8 years
C. 9 years
D. 10 years
Answer: Option C
776. A company purchases an asset for P10,000.00 and plans to keep it for 20 years. If the salvage value is zero at the end of the
20th year, what is the depreciation in the third year? Use SYD method.
A. P857.14
B. P862.19
C. P871.11
D. P880.00
Answer: Option A
777. An asset is purchased for P500,000.00. The salvage value in 25 years is P100,000.00. What is the total depreciation in the first
three years using straight-line method?
A. P45,000.00
B. P46,000.00
C. P47,000.00
D. P48,000.00
Answer: Option D
778. A machine has an initial cost of P50,000 and a salvage value of P10,000 after 10 years. What is the book value after 5 years
using straight line depreciation?
A. P30,000.00
B. P31,000.00
C. P30,500.00
D. P31,500.00
Answer: Option A
779. An asset is purchased for P9,000.00. Its estimated life is 10 years after which it will be sold for P1,000.00. Find the book value
during the first year if SYD depreciation is used.
A. P7,545.45
B. P7,320.11
C. P7,490.00
D. P7,690.12
Answer: Option A
780. The cost of equipment is P500,000 and the cost of installation is P30,000. If the salvage value is 10% of the cost of equipment
at the end of years, determine the book value at the end of the fourth year. Use straight-line method.
A. P146,320.50
B. P146,000.00
C. P146,230.50
D. P146,023.50
Answer: Option B
781. An asset is purchased for P20,000.00. Its estimated life is 10 years after which it will be sold for P12,000.00. Find the
depreciation for the first year using SYD method.
A. P1,545.45
B. P1,454.54
C. P1,344.21
D. P1,245.45
Answer: Option B
782. A machine has an initial cost of P50,000 and a salvage value of P10,000 after 10 years. Find the book value after 5 years using
straight-line depreciation.
A. P31,000.00
B. P31,500.00
C. P30,000.00
D. P30,500.00
Answer: Option C
783. A machine has an initial cost of P50,000.00 and a salvage value of P10,000.00 after 10 years. What is the straight line method
depreciation rate as a percentage of the initial cost?
A. 10%
B. 8%
C. 7%
D. 9%
Answer: Option B
784. A machine costing P45,000 is estimated to have a book value of P4,350 when retired at the end of 6 years. Depreciation cost is
computed using a constant percentage of the declining book value. What is the annual rate of depreciation in %?
A. 32.50%
B. 32.25%
C. 32.00%
D. 32.75%
Answer: Option B
785. An asset is purchased for P120,000.00. Its estimated life is 10 years, after which it will be sold for P12,000.00. Find the
depreciation for the second year using the sum-of-years’ digit method.
A. P17,578.13
B. P17,412.43
C. P17,344.67
D. P17,672.73
Answer: Option D
786. A machine costing P720,000 is estimated to have a book value of P40,545.73 when retired at the end of 10 years. Depreciation
cost is computed using a constant percentage of the declining book value. What is the annual rate of depreciation in %?
A. 25%
B. 26%
C. 27%
D. 28%
Answer: Option A
787. An asset is purchased for P9,000.00. Its estimated economic life is 10 years after which it will be sold for P1,000.00. Find the
depreciation in the first three years using straight line method.
A. P2,400.00
B. P2,412.34
C. P2,250.00
D. P2,450.00
Answer: Option A
788. An engineer bought an equipment for P500,000. He spent an additional amount of P30,000 for installation and other expenses. The estimated useful life of the
equipment is 10 years. The salvage value is x% of the first cost. Using the straight line method of depreciation, the book value at the end of 5 years will be P291,500.
What is the value of x?
A. 0.2
B. 0.4
C. 0.3
D. 0.1
Answer: Option D
789. The initial cost of a paint sand mill, including its installation, is P800,000. The BIR approved life of this machine is 10 years for depreciation. The estimated salvage
value of the mill is P50,000 and the cost of dismantling is estimated to be P15,000. Using straight-line depreciation, what is the annual depreciation charge?

A. P75,500.00
B. P76,000.00
C. P76,500.00
D. P77,000.00
Answer: Option C
7790. The initial cost of a paint sand mill, including its installation, is P800,000. The BIR approved life of this machine is 10 years for depreciation. The estimated salvage
value of the mill is P50,000 and the cost of dismantling is estimated to be P15,000. Using straight-line depreciation, what is the book value of the machine at the end of six
years?
A. P341,000.00
B. P343,000.00
C. P340,000.00
D. P342,000.00
Answer: Option A
791. A unit of welding machine cost P45,000 with an estimated life of 5 years. Its salvage value is P2,500. Find its depreciation rate
by straight-line method.
A. 18.89%
B. 19.21%
C. 19.58%
D. 19.89%
Answer: Option A
792. A tax and duty free importation of a 30 hp sandmill for paint manufacturing cost P360,000.00. Bank charges arrastre and brokerage cost P5,000.00. Foundation and
installation costs were P25,000.00. Other incidental expenses amount to P20,000.00. Salvage value of the mill is estimated to be P60,000 after 20 years. Find the appraisal
value of the mill using straight line depreciation at the end of 10 years.

A. P234,000.00
B. P235,000.00
C. P234,500.00
D. P235,500.00
Answer: Option B
793. An equipment costs P10,000 with a salvage value of P500 at the end of 10 years. Calculate the annual depreciation cost by
sinking-fund method at 4% interest.
A. P791.26
B. P792.61
C. P726.17
D. P771.26
Answer: Option A
794. A machine initially worth P50,000 depreciates in value each year by 20% of its value at the beginning of that year. Find its book
value when it is 9 years old.
A. P6,710.89
B. P6,400.89
C. P6,666.89
D. P6,512.78
Answer: Option A
795. A consortium of international telecommunications companies contracted for the purchase and installation of fiber optic cable linking Manila City and Cebu City at a
total cost of P960 million. This amount includes freight and installation charges estimated at 10% of the above total contract price. If the cable shall be depreciated over a
period of 15 years with zero salvage value and money is worth 6% per annum, what is the annual depreciation charge?

A. P41,044,903.40
B. P41,211,158.40
C. P41,254,000.40
D. P41,244,253.40
Answer: Option D
796. An asset is purchased for P9,000.00. Its estimated economic life is 10 years after which it will be sold for P1,000.00. Find the
depreciation in the first three years using sum-of-years’ digit method.
A. P3,279.27
B. P3,927.27
C. P3,729.27
D. P3,792.72
Answer: Option B
797. A radio service panel truck initially cost P560,000. Its resale value at the end of the 5th year of the useful life is estimated at
P150,000. By means of declining balance method, determine the depreciation charge for the second year.
A. P99,658.41
B. P99,128.45
C. P99,290.00
D. P99,378.45
Answer: Option A
798. Shell Philippines, a multinational company, has a total gross income for a particular year of P50,000,000. The taxable income after taking all deductions except for
depletion is P18,500,000. What is the allowable depletion allowance for that particular year? Take percentage of gross income for oil as 22%.

A. P9,358.41
B. P9,228.45
C. P9,250.00
D. P9,308.45
Answer: Option C
799. The Saudi Arabian Oil Refinery developed an oil well which is estimated to contain 5,000,000 barrels of oil at an initial cost of
$50,000,000. What is the depletion charge during the year where it produces half-million barrels of oil? Use Unit or Factor method in computing depletion.

A. $500,000,000
B. $510,000,000
C. $525,000,000
D. $550,000,000
Answer: Option A
800. The first cost of a certain equipment is P324,000 and a salvage value of P50,000 at the end of its life of 4 years. If money is
worth 6% compounded annually, find the capitalized cost.
A. P540,090.34
B. P541,033.66
C. P540,589.12
D. P541,320.99
Answer: Option B
801. An item is purchased for P100,000. Annual cost is P18,000. Using interest rate of 8%, what is the capitalized cost of perpetual
service?
A. P310,000
B. P315,000
C. P320,000
D. P325,000
Answer: Option D
802. A corporation uses a type of motor which costs P5,000 with 2 life years and final salvage value of P800. How much could the corporation afford to pay for another
type of motor of the same purpose whose life is 3 years a with a final salvage value of P1,000. Money is worth 4%.

A. P7,892.13
B. P7,157.40
C. P7,489.21
D. P7,300.12
Answer: Option B
803. A motorcycle costs P50,000 and has an expected life of 10 years. The salvage value is estimated to be P2,000 and annual
operating cost is estimated at P1,000. What is the appropriate rate of return on the investment if the annual revenue is P10,000?
A. 12.12%
B. 12.54%
C. 12.72%
D. 12.99%
Answer: Option C
804. At 6%, find the capitalized cost of a bridge whose cost is P250M and life is 20 years, if the bridge must be partially rebuilt at a
cost of P100M at the end of each 20 years.
A. P297,308,323.10
B. P298,308,323.10
C. P296,308,323.10
D. P295,308,323.10
Answer: Option D
805. A new broiler was installed by a textile plant at a total cost of P300,000 and projected to have a useful life of 15 years. At the end of its useful life, it is estimated to
have a salvage value of P30,000. Determine its capitalized cost if interest is 18% compounded annually.

A. P323,500.33
B. P322,549.33
C. P332,509.33
D. P341,240.33
Answer: Option B
806. A man planned of building a house. The cost of construction is P500,000 while annual maintenance cost is estimated at
P10,000. If the interest rate is 6%, what is the capitalized cost of the house?
A. P666,000.00
B. P666,666.67
C. P633,333.33
D. P650,000.00
Answer: Option B
807. An untreated electrical wooden pole that will last 10 years under a certain soil condition, costs P1,200.00. If a treated pole will last for 20 years, what is the
maximum justifiable amount that can be paid for the treated pole, if the maximum return on investment is 12%. Consider annual taxes and insurance amount to be 1% of
the first cost.
A. P1,612.01
B. P1,559.50
C. P1,789.23
D. P1,409.38
Answer: Option B
808. A granite quarry purchased for P1,600,000 is expected to be exhausted at the end of 4 years. If the resale value of the land is
P100,000, what annual income is required to yield an investment rate of 12%? Use a sinking fund rate of 3%.
A. P550,540.57
B. P551,540.57
C. P552,540.57
D. P553,540.57
Answer: Option A
809. A manufacturer produces certain items at a labor cost per unit of P315, material cost per unit is P100, variable cost of P3.00 each. If the item has a selling price of
P995, how many units must be manufactured each month for the manufacturer to breakeven if the monthly overhead is P461,600?

A. 782
B. 800
C. 806
D. 812
Answer: Option B
810. The annual maintenance cost of a machine shop is P69,994. If the cost of making a forging is P56 per unit and its selling price
is P135 per forged unit, find the number of units to be forged to break-even.
A. 892
B. 870
C. 886
D. 862
Answer: Option C
811. A manufacturer produces certain items at a labor cost of P115 each, material cost of P76 each and variable cost of P2.32 each. If the item has a unit price of P600,
how many units must be manufactured each month for the manufacturer to break even if the monthly overhead is P428,000.

A. 1,033
B. 1,037
C. 1,043
D. 1,053
Answer: Option D
812. Steel drum manufacturer incurs a yearly fixed operating cost of $200,000. Each drum manufactured cost $160 to produce and
sells $200. What is the manufacturer’s break-even sales volume in drums per year?
A. 5,031
B. 5,017
C. 5,043
D. 5,000
Answer: Option D
813. XYZ Corporation manufactures bookcases that sell for P65.00 each. It costs XYZ corporation P35,000 per year to operate its plant. This sum includes rent,
depreciation charges on equipment, and salary payments. If the cost to produce one bookcase is P50.00, how many cases must be sold each year for XYZ to avoid taking
a loss?
A. 2,334
B. 2,443
C. 2,223
D. 2,322
Answer: Option A
814. A company which manufactures electric motors has a production capacity of 200 motors a month. The variable costs are P150.00 per motor. The average selling
price of the motors is P275.00. Fixed costs of the company amount to P20,000 per month which includes taxes. Find the number of motors that must be sold each month
to breakeven.
A. 160
B. 157
C. 153
D. 163
Answer: Option A
815. The annual maintenance cost of a machine is P70,000. If the cost of making a forging is P56 and its selling price is P125 per
forged unit. Find the number of units to be forged to breakeven.
A. 1,000
B. 1,012
C. 1,015
D. 1,018
Answer: Option C
816. A manufacturing firm maintains one product assembly line to produce signal generators. Weekly demand for the generators is 35 units. The line operates for 7 hours
per day, 5 days per week. What is the maximum production time per unit in hours required of the line to meet the demand?

A. 1.0 hours per unit

B. 1.2 hours per unit
C. 1.4 hours per unit
D. 1.6 hours per unit
Answer: Option A
817. Compute the number of blocks that an ice plant must be able to sell per month to break even based on the following data:
Cost of electricity per block – P20.00
Tax to be paid per block – P2.00
Real Estate Tax – P3,500.00 per month
Salaries and Wages – P25,000.00 per month
Others – P12,000.00 per month
Selling price of ice – P55.00 per block
A. 1,220
B. 1,224
C. 1,228
D. 1,302
Answer: Option C
818. JRT Industries manufactures automatic voltage regulators at a labor cost of P85.00 per unit and material cost of P350.00 per unit. The fixed charges on the business
are P15,000 per month and the variable costs are P20.00 per unit. If the automatic voltage regulators are sold to retailers at P580.00 each, how many units must be
produced and sold per month to breakeven?
A. 120
B. 124
C. 128
D. 130
Answer: Option A
819. General Electric Company which manufactures electric motor has a capacity of producing 150 motors a month. The variable costs are P4,000.00 per month, the
average selling price of the motor is P750.00 per motor. Fixed costs of the company amount to P78,000.00 per month which includes all taxes. Determine the number of
motors to be produced per month to breakeven.
A. 100
B. 104
C. 110
D. 112
Answer: Option C
820. A telephone switchboard 100 pair cable can be made up with either enamelled wire or tinned wire. There will be 400 soldered connections. The cost of soldering a
connection on the enamelled wire will be P1.65, on the tinned wire, it will be P1.15. A 100-pair cable made up with enamelled wire cost P0.55 per linear foot and those
made up of tinned wire cost P0.75 per linear foot.
Determine the length of cable run in feet so that the cost of each installation would be the same.

A. 1,000 feet
B. 1,040 feet
C. 1,100 feet
D. 1,120 feet
Answer: Option A
821. A local factory assembling calculators produces 400 units per month and sells them at P1,800 each. Dividends are 8% on the 8,000 shares with par value of P250
each. The fixed operating cost per month is P25,000. Other costs are P1,000 per unit. If 200 units were produced a month, determine the profit or loss.

A. Profit of P121,666.67
B. Profit of P21,666.67
C. Loss of P121,666.67
D. Loss of P21,666.67
Answer: Option A
822. Nike shoes manufacturer produces a pair of Air Jordan Shoes at a labor cost of P900.00 a pair and a material cost of P800.00 a pair. The fixed charges on the
business are P5,000,000 a month and the variable costs are P400.00 a pair. Royalty to Michael Jordan is P1,000 per pair of shoes sold. If the shoes sell at P5,000 a pair,
how many pairs must be produced each month for the manufacturer to breakeven?

A. 2,590
B. 2,632
C. 2,712
D. 2,890
Answer: Option B
823. In a steel fabrication shop located somewhere in Cebu, various size rivet holes must be made in structural members. This may be done by laying out the position of
the hole on the members and using a drill press for this method, a machinist wage rate is P20.25 per hour and he can drill 27 holes per hour. An alternative method is by
the use of the multiple punch machine. In this process, the machinist wage rate is P20.00 per hour and he can complete 8 holes per minute. This method requires P0.50 per
holes to set the multiple punch machine and an installation cost of P2,000.00. If all other costs are the same, for what number of rivet holes will the multiple punch
machine pay for itself?

A. 9,601
B. 9,592
C. 9,581
D. 9,566
Answer: Option A
824. A new civil engineer produces a certain construction material at a labor cost of P16.20 per piece, material cost of P38.50 per piece and variable cost of P7.40 per
piece. The fixed charge on the business is P100,000.00 per month. If he sells the finished product at P95.00 each, how many pieces must be manufactured in each month
to breakeven?
A. 3,045
B. 3,035
C. 3,030
D. 3,040
Answer: Option D
825. The Asian Transmission Co. makes and sells certain automotive parts. Present sales volume is 500,000 units per year at a
selling price of fifty centavos (P0.50) per unit. Fixed expenses total P80,000.00 per year. What is the present total profit for a year?
A. P168,000
B. P170,000
C. P172,000
D. P174,000
Answer: Option B
826. The Asian Transmission Co. makes and sells certain automotive parts. Present sales volume is 500,000 units per year at a selling price of fifty centavos (P0.50) per
unit. Fixed expenses total P80,000.00 per year. What is the present breakeven point in units?

A. 160,000
B. 162,000
C. 165,000
D. 170,000
Answer: Option A
827. A factory engaged in the fabrication of an automobile part with a production capacity of 700,000 units per year is only operating at 62% of capacity due to
unavailability of the necessary foreign currency to finance the importation of their raw materials. The annual income is P430,000.00. Annual fixed costs are P190,000.00
and the variable costs are P0.348 per unit. What is the current profit or loss?

A. P87,450
B. P88,960
C. P88,450
D. P87,960
Answer: Option B
828. A factory engaged in the fabrication of an automobile part with a production capacity of 700,000 units per year is only operating at 62% of capacity due to
unavailability of the necessary foreign currency to finance the importation of their raw materials. The annual income is P430,000.00. Annual fixed costs are P190,000.00
and the variable costs are P0.348 per unit. What is the breakeven point?

A. 294,560
B. 291,000
C. 290,780
D. 295,490
Answer: Option D
829. A certain firm has the capacity to produce 650,000 units of product per year. At present, it is operating at 62% capacity. The firm’s annual income is P4,160,000.00.
Annual fixed costs are P1,920,000.00 and the variable costs are equal to P3.56 per unit of product. What is the firm’s annual profit or loss?

A. P814,320
B. P815,230
C. P816,567
D. P817,239
Answer: Option A
830. A certain firm has the capacity to produce 650,000 units of product per year. At present, it is operating at 62% capacity. The firm’s annual income is P4,160,000.00.
Annual fixed costs are P1,920,000.00 and the variable costs are equal to P3.56 per unit of product. What volume of sales does the firm breakeven?

A. P3,354,680
B. P3,534,880
C. P3,155,690
D. P3,254,680
Answer: Option A
831. A small shop in Bulacan fabricates threshers for palay producers in the locality. The shop can produce each thresher at a labor cost of P1,800.00. The cost of
materials for each unit is P2,500.00. The variable costs amounts to P650.00 per unit while fixed charges incurred per annum totals P69,000.00. If the portable threshers
are sold at P7,800.00 per unit, how many units must be produced and sold per annum to breakeven?

A. 28
B. 25
C. 26
D. 27
Answer: Option B
832. The direct labor cost and material cost of a certain product are P300 and P400 per unit, respectively. Fixed charges are P100,000 per month and other variable costs
are P100 per unit. If the product is sold at P1,200 per unit, how many units must be produced and sold to breakeven?

A. 280
B. 250
C. 260
D. 270
Answer: Option B
833. The following data for year 2000 are available for Cagayan Automotive Company which manufactures and sells a single
automotive product line:
Unit selling price – P40.00
Unit variable cost – P20.00
Unit contribution margin – P20.00
Total fixed costs – P200,000.00
What is the breakeven point in units for the current year?
A. 10,000
B. 10,100
C. 10,050
D. 10,200
Answer: Option A
834. The cost of producing a small transistor radio set consists of P230.00 for labor and P370.00 for material. The fixed charges is operating the plant is P1,000,000.00 per
month. The variable cost is P10.00 per set. The radio set can be sold for P750.00 each. Determine how many sets must be produced per month to breakeven.

A. 7,123
B. 7,133
C. 7,143
D. 7,153
Answer: Option C
835. An item which can be sold for P63.00 per unit wholesale is being produced with the following cost data:
Labor cost – P10.00 per unit
Material cost – P15.00 per unit
Fixed charges – P10,000.00
Variable cost – P8.00 per unit
What is the breakeven point sales volume if one out of every 10 units produced is defective and is rejected with only full recovery on
materials?
A. P25,011
B. P25,111
C. P25,121
D. P25,132
Answer: Option A
836. A method of depreciation whereby the amount to recover is spread uniformly over the estimated life of the asset in terms of the
periods or units of output.
A. Straight line method
B. Sinking fund method
C. Declining balance method
D. SYD method
Answer: Option A
837. Which of the following depreciation methods cannot have a salvage value of zero?
A. Declining balance method
B. Sinking fund method
C. Straight line method
D. SYD method
Answer: Option A
838. A method of depreciation where a fixed sum of money is regularly deposited at compound interest in a real or imaginary fund in
order to accumulate an amount equal to the total depreciation of an asset at the end of the asset’s estimated life.
A. Straight line method
B. Sinking fund method
C. Declining balance method
D. SYD method
Answer: Option B
839. The function of interest rate and time that determines the cumulative amount of a sinking fund resulting from specific periodic
deposits.
A. Sinking fund factor
B. Present worth factor
C. Capacity factor
D. Demand factor
Answer: Option A
840. The first cost of any property includes:
A. The original purchase price and freight and transportation charges
B. Installation expenses
C. Initial taxes and permits fee
D. All of these
Answer: Option D
841. In SYD method, the sum of years digit is calculated using which formula with n = number of useful years of the equipment.
A. n(n – 1)/2
B. n(n + 1)/2
C. n(n+1)
D. n(n-1)
Answer: Option B
842. Capitalized cost of any property is equal to the:
A. Annual cost
B. First cost + Interest of the first cost
C. First cost + Cost of perpetual maintenance
D. First cost + Salvage value
Answer: Option C
843. The lessening of the value of an asset due to the decrease in the quantity available (referring to the natural resources, coal, oil,
etc).
A. Depreciation
B. Depletion
C. Inflation
D. Incremental cost
Answer: Option B
844. Is the simplest form of business organization.
A. Sole proprietorship
B. Partnership
C. Enterprise
D. Corporation
Answer: Option A
845. An association of two or more persons for a purpose of engaging in a profitable business.
A. Sole proprietorship
B. Enterprise
C. Partnership
D. Corporation
Answer: Option C
846. A distinct legal entity which can practically transact any business transaction which a real person could do.
A. Sole proprietorship
B. Enterprise
C. Partnership
D. Corporation
Answer: Option D
847. Double taxation is a disadvantage of which business organization?
A. Sole proprietorship
B. Partnership
C. Corporation
D. Enterprise
Answer: Option C
848. Which is NOT a type of business organization?
A. Sole proprietorship
B. Corporation
C. Enterprise
D. Partnership
Answer: Option C
849. What is the minimum number of incorporators in order that a corporation be organized?
A. 3
B. 5
C. 10
D. 7
Answer: Option B
850. In case of bankruptcy of a partnership,
A. The partners are not liable for the liabilities of the partnership
B. The partnership assets (excluding the partners’ personal assets) only will be used to pay the liabilities.
C. The partners’ personal assets are attached to the debt of the partnership
D. The partners may sell stock to generate additional capital.
Answer: Option C
851. The method of depreciation where fixed sum of money is regularly deposited at compound interest in a real or imaginary fund
in order to accumulate an amount equal to the total depreciation of an asset at the end of the asset’s estimated life is known as;
A. straight line method
B. SYD method
C. Declining balance method
D. Sinking fund method
Answer: Option D
852. The term used to express the series of uniform payments occurring at equal interval of time is;
A. compound interest
B. annuity
C. perpetuity
D. depreciation
Answer: Option B
853. The profit derived from a project or business enterprise without consideration of obligations to financial contributors and claims
of others based on profit is known as;
A. yield
B. earning value
C. economic return
D. expected yield
Answer: Option C
854. As applied to capitalized asset, the distribution of the initial cost by periodic changes to operation as in depreciation or the
reduction of the depth by either periodic or irregular prearranged program is called
A. amortization
B. annuity
C. depreciation
D. capital recovery
Answer: Option A
855. Those funds that are required to make the enterprise or project going on.
A. banking
B. accumulated amount
C. working capital
D. principal or present worth
Answer: Option C
856. These are product or services that are desired by humans and will be purchased if money is available after the required
necessities have been obtained
A. utilities
B. necessities
C. luxuries
D. producer good and services
Answer: Option C
857. These are product or services that are required to support human life and activities, that will be purchased in somewhat the
same quantity even though the price varies considerably.
A. utilities
B. necessities
C. luxuries
D. producers goods and services
Answer: Option B
858. A condition where only a few individuals produce a certain product and that any action of one will lead to almost the same
action of the others.
A. oligopoly
B. semi-monopoly
C. monopoly
D. perfect competition
Answer: Option A
859. This occurs in a situation where a commodity or service is supplied by a number of vendors and there is nothing to prevent
additional vendors entering the market.
A. perfect competition
B. monopoly
C. oligopoly
D. elastic demand
Answer: Option A
860. It is the amount that a willing buyer will pay to a willing seller for a property where each has equal advantage and is under no
compulsion to buy or sell.
A. fair value
B. use value
C. market value
D. book value
Answer: Option C
861. It is defined to be the capacity of a commodity to satisfy human want.
A. discount’
B. luxuries
C. utility
D. necessity
Answer: Option C
862. A form a summary of assets, liabilities and net worth;
A. balance method
B. break-even point
C. balance sheet
D. production
Answer: Option C
863. The worth of a property, which is equal to the original cost less depreciation, is known as;
A. earning value
B. scrap value
C. book value
D. face value
Answer: Option C
864. When using net present worth calculation to compare two projects, which of the following could invalidated the calculations?
A. mutually exclusive projects
B. evaluation over different periods
C. non-conventional cash flows
D. difference in the magnitude of the projects
Answer: Option B
865. Which of the following is a form of business/company ownership?
A. partnership
B. corporation
C. single proprietorship
D. all of these
Answer: Option D
866. What must two investments with the same present worth and unequal lives have?
A. identical salvage value
B. different salvage value
C. identical equivalent uniform annual cash flows
D. different equivalent annual cash flows
Answer: Option C
867. What is the formula for a straight-line depreciation rate?
A. (100% – %net salvage value)/Estimated service life
B. %net salvage value/Estimated service life
C. 100%net salvage value/estimated service life
D. average net salvage value/estimated service life
Answer: Option A
868. The amount received from the sale of an additional unit of a product is termed as:
A. marginal cost
B. marginal utility
C. marginal unit
D. marginal revenue
Answer: Option D
869. An accounting book where the original record of all transaction is ordinarily recorded.
A. journal
B. credit entry
C. debit entry
D. transaction record
Answer: Option A
870. An interest-earning fund in which equal deposits are made at equal intervals of time for the purpose of gradually accumulating
a specific sum of money required at some future date.
A. amortization
B. sinking fund
C. annuity
D. capitalized cost
Answer: Option B
871. What is work-in-process classified as?
A. an asset
B. liability
C. an expense
D. owner’s equity
Answer: Option A
872. Which is a form of business/company ownership?
A. partnership
B. corporation
C. single proprietorship
D. all of the list
Answer: Option D
873. The decrease in value of a physical property due to the passage of time;
A. inflation
B. depletion
C. recession
D. depreciation
Answer: Option D
874. We may classify an interest rate, which specifies the actual rate an interest on the principal for one year as:
A. Nominal rate
B. Rate of return
C. Exact interest rate
D. Effective rate
Answer: Option D
875. This law states that “When the use of one of the factors of production is limited, either in increasing cost or by absolute quantity,
a point will be reached beyond which an increase in the variable factors will result in less than proportionate increase in output.”
A. Law of Supply and Demand
B. Law of Diminishing Return
C. Law of Gravity
D. Law of diminishing Utility
Answer: Option D
876. The difference between the present worth and the worth at some future time is:
A. Discount
B. Profit
C. Credit
D. Debit
Answer: Option A
877. The act of charging two or more buyers or sellers different prices for the same product where the elasticities of supply or
demand at each price level differ among market is known as:
A. Price optimization
B. Price discrimination
C. Price manipulation
D. Price war
Answer: Option B
878. A formal organization of producers within an industry forming a perfect collision purposely formed to increase profit and block
newcomers from the industry, is termed as;
A. Oligopoly
B. Monopoly
C. Corporation
D. Cartel
Answer: Option D
879. A situation in which rival firms drive prices down through attempts to undercut each other’s price is called;
A. Price war
B. Price discrimination price
C. Price Leadership
D. Oligopolistic monopoly
Answer: Option A
880. The price that the quantity per unit time that the buyers want to buy is just equal to the quantity the sellers want to sell is called;
A. Break-even price
B. Equilibrium price
C. Minimum price
D. Maximum price
Answer: Option B
881. The length of time during which a property is capable of performing the function for which it was designed and manufactured is
termed as;
A. economic life
B. Life span
C. Eternal life
D. Physical life
Answer: Option D
882. It is a distinct legal entity, separate from individuals who own it and which can engage in practically any business transaction
which real person can do.
A. Partnership
B. Single proprietorship
C. Eternal Life
D. Physical life
Answer: Option A
883. A market whereby there is only one buyer of an item for which there are no goods substitute.
A. Monopoly
B. Oligopoly
C. Oligopsony
D. Monopsony
Answer: Option D
884. This form of business ownership is a legal entity possessing many of the legal powers of individuals. It can hold title to property,
sue and be sued in its own name. It is called:
A. corporation
B. company
C. general partnership
D. individual proprietorship
Answer: Option A
885. The balance sheet is a statement showing the financial status of the company at any given time. Which of the statements is not
a part of the balance sheet.
A. liabilities
B. assets
C. cost of goods sold
D. net worth
Answer: Option C
886. Refers to cost of merchandise which excludes freight and insurance cost;
A. freight-on-board
B. sunk cost
C. debentures
D. book value
Answer: Option D
887. A fund into which annual deposits of A are made in order to accumulate fund F at n years in the future.
A. Amortization
B. Annuity
C. Depreciation
D. Sinking fund
Answer: Option D
888. Cash money credit necessary to establish and operate an enterprise.
A. funds
B. capital
C. liabilities
D. assets
Answer: Option B
889. The worth of property which is equal to the original cost less depreciation;
A. scrap value
B. earning value
C. book value
D. face value
Answer: Option C
890. Intangible assets of a corporation or company
A. dacion-en-pago
B. investment
C. patents
D. equity
Answer: Option C
891. Additional information to prospective bidders on contract documents issued to bidding date;
A. escalatory clause
B. delicts
C. technological assessments
D. bid bulletin
Answer: Option D
892. A civil wrong committed by one person causing damage to another person or his property or reputation;
A. tort
B. negligence
C. material breach
D. fraud
Answer: Option A
893. What is an annuity?
A. A series of equal payments at equal time periods.
B. The cost of manufacturing a product
C. An investment that yields an equal amount of interest each year
D. The overhead cost per unit of production
Answer: Option A
894. Consist of the actual counting or determination of the actual quantity of the materials on hands as of a given date;
A. Physical inventory
B. Technological assessment
C. Material update
D. Material count
Answer: Option A
895. An artificial expense that spreads the purchase price of an assets or other property over a number of years
A. Depreciation amnesty
B. Sinking fund
C. Bond
D. None of these
Answer: Option A
896. Estimated value at the end of the useful life;
A. salvage value
B. economic life
C. balance sheet
D. compounded annually
Answer: Option A
897. The recorded current value of an asset is known as:
A. scrap value
B. book value
C. salvage value
D. present worth
Answer: Option B
898. The ratio of the interest payment to the principal for a given unit of time and is usually expressed as percentage of the principal
is known as:
A. investment
B. nominal interest
C. interest
D. interest rate
Answer: Option D
899. A method of depreciation whereby the amount to recover is spread over the estimated life of the asset in terms of the periods
or units of output is called
A. SOYD method
B. Declining balance method
C. Straight line method
D. Sinking fund method
Answer: Option C
900. The interest rate at which the present worth of cash flow of project is zero, or the interest earned by an investment.
A. Rate of return
B. Effective rate
C. Nominal rate
D. Yield
Answer: Option A
901. It is the amount of money earned by given capital.
A. Interest
B. Annuity
C. Cash flow
D. None of these
Answer: Option A
902. Which of the following is a type of simple interest;
A. Ordinary
B. Exact
C. Both A and B
D. None of these
Answer: Option C
903. The interest earned by the principal competed at the end of the investment period, it varies directly with time.
A. Compound interest
B. Simple interest
C. Annuity
D. Perpetuity
Answer: Option B
904. The interest is completed every end of each interest period and the interest earned for the period is added to the principal.
A. Compound interest
B. Simple interest
C. Annuity
D. Perpetuity
Answer: Option A
905. It is rate quoted in describing a given variety of compound interest.
A. nominal rate
B. effective rate
C. simple rate
D. compound rate
Answer: Option A
906. It is the actual interest earned in one year period.
A. Nominal rate
B. Effective rate
C. Simple rate
D. Compound rate
Answer: Option B
907. A series of uniform payments made at equal intervals of time.
A. perpetuity
B. interest
C. rate
D. annuity
Answer: Option D
908. Which of the following is type of annuity.
A. Ordinary
B. Deferred
C. Annuity due
D. All of these
Answer: Option A
909. An annuity where the payments periods extend forever or the periodic payments continue indefinitely.
A. Perpetuity
B. Interest
C. Rate
D. Annuity
Answer: Option A
910. The payment is made at the end of each period starting from the first period.
A. Ordinary annuity
B. Deferred annuity
C. Annuity due
D. All of these
Answer: Option A
911. The first payment is deferred a certain number of periods after the first.
A. Ordinary annuity
B. Deferred annuity
C. Annuity due
D. None of these
Answer: Option B
912. The payment is made at the beginning of each period starting from the first period.
A. Ordinary annuity
B. Deferred annuity
C. Annuity due
D. None of the due
Answer: Option C
913. It is an application of perpetuity.
A. Capitalized cost
B. Machine cost
C. Manpower cost
D. Equipment cost
Answer: Option A
914. It refers to the decrease in the value of an asset due to usage of passage of time.
A. Interest
B. Annuity
C. Depreciation
D. Perpetuity
Answer: Option C
915. Which of the following is the method of computing depreciation
A. Straight line depreciation
B. Sinking fund method
C. Sum of the years method
D. All of these.
Answer: Option D
916. The most common method used in computing depreciation;
A. Straight line depreciation
B. Sinking fund method
C. Sum of the years digit method
D. Declining balance method
Answer: Option A
917. The depreciation charge in this method is assumed to vary directly to the number of years and inversely to the sum of the
year’s digit.
A. Straight line depreciation
B. Sinking fund method
C. Sum of the year’s digit method
D. Declining balance method
Answer: Option C
918. It is invested yearly at a rate of I to amount to (FC –SV) at the end of the life to the property.
A. Straight line depreciation
B. Sinking fund method
C. Sum of the years digit method
D. Declining balance method
Answer: Option B
919. A written contract to pay a certain redemption value on a specified redemption date and to pay equal dividends periodically.
A. Bond
B. Capital
C. Interest
D. Annuity
Answer: Option A
920. A method of determining when cost exactly equal to revenue.
A. Experimental method
B. Break-even method
C. Break-add method
D. None of these
Answer: Option B
921. 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
Answer: Option D
922. 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
Answer: Option A
923. Annie buys a television set from a merchant who offers P25,000.00 at the end of 60 days. 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
Answer: Option C
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
Answer: Option B
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
Answer: Option C
926. If P16,000 earns P480 in 9 months, what is the annual rate of interest?
A. 1%
B. 2%
C. 3%
D. 4%
Answer: Option D
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. P 13,333.20
D. P 16,323.20
Answer: Option A
928. A time deposit of P110,000 for 31 days 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%
Answer: Option D
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
Answer: Option A
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%
Answer: Option D
931. Accumulate P5,000.00 for 10 years at 8% compounded quarterly.
A. P 12,456.20
B. P 13,876.50
C. P 10,345.80
D. P 11,040.20
Answer: Option D
932. Accumulate P5,000.00 for 10 years at 8% compounded semi-annually.
A. P 10,955.61
B. P 10,233.67
C. P 9,455.67
D. P 11,876.34
Answer: Option A
933. Accumulate P5,000.00 for 10 years at 8% compounded monthly
A. P 15,456.75
B. P 11,102.61
C. P 10,955.61
D. P 10,955.61
Answer: Option B
934. Accumulate P5,000.00 for 10 years at 8% compounded annually.
A. P 10,794.62
B. P 8,567.97
C. P 10,987.90
D. P 7,876.87
Answer: Option A
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
Answer: Option C
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
Answer: Option B
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. P 1,125.00
D. P 1,526.00
Answer: Option B
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
Answer: Option A
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. P 28,000.00
D. P 10,180.00
Answer: Option A
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%
Answer: Option D
941. 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
Answer: Option B
942. An interest of 8% compounded semiannually is how many percent if compounded quarterly?
A. 7.81%
B. 7.85%
C. 7.92%
D. 8.01%
Answer: Option C
943. 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?
A. P 125,458.36
B. P 147,456.36
C. P 162,455.63
D. P 171,744.44
Answer: Option D
944. 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?
A. 4.55 years
B. 4.77 years
C. 5.11 years
D. 5.33 years
Answer: Option B
945. 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?
A. P 178,313.69
B. P 153,349.77
C. P 170,149.77
D. P 175,343.77
Answer: Option C
946. What interest compounded monthly is equivalent to an interest rate of 14% compounded quarterly
A. 1.15%
B. 13.84%
C. 10.03%
D. 11.52%
Answer: Option B
947. 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%.
A. P 152.87
B. P 112.34
C. P 187.98
D. P 176.67
Answer: Option A
948. A firm borrows P2,000.00 for 6 years at 8%. At the end of 6 years, it renews the loan for the amount due plus P2,000 more for
2 years at 8%. What is the lump sum due?
A. P 5,679.67
B. P 6,789.98
C. P 6,034.66
D. P 5,888.77
Answer: Option C
949. At an annual rate of return of 8%, what is the future worth of P1,000 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
Answer: Option D
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
Answer: Option A
951. P4,000 is borrowed for 75 days at 16% per annum simple interest. How much will be due at the end of 75 days?
A. P4,133.33
B. P4,333.33
C. P4,166.67
D. P4,150.00
Answer: Option A
952. A deposit of P110,000.00 was made for 31 days. The net interest after deducting 20% withholding tax is P890.36. Find the rate
of return annually.
A. 11.95%
B. 12.75%
C. 11.75%
D. 12.25%
Answer: Option C
953. Agnes Abanilla was granted a loan of P20,000 by her employer CPM Industrial Fabricator and Construction Corporation with an interest 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. P18,600
B. P18,800
C. P19,000
D. P19,200
Answer: Option B
954.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. P30,000
B. P29,000
C. P28,000
D. P27,859
Answer: Option C
955. If you borrowed money from your friend with simple interest of 12%, find the present worth of P50,000 which is due at the end
of 7 months.
A. P46,200
B. P44,893
C. P46,730
D. P45,789
Answer: Option C
956. Annie buys a television set from a merchant who ask P1,250 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?
A. P1,233.55
B. P1,244.68
C. P1,323.66
D. P1,392.67
Answer: Option A
957. 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
the 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. 15.90%
B. 16.28%
C. 16.30%
D. 16.20%
Answer: Option B
958. A man borrowed P20,000 from a local commercial bank which has a simple interest rate 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. 12%
B. 14%
C. 10%
D. 19%
Answer: Option D
959. 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. P408.00
B. P415.00
C. P551.00
D. P450.00
Answer: Option A
960. A man borrowed P100,000 at the interest rate of 12% per annum, compounded quarterly. What is the effective rate?
A. 3%
B. 13.2%
C. 12%
D. 12.55%
Answer: Option D
961. What is the corresponding effective rate of 18% compounded semi-quarterly?
A. 19.25%
B. 19.48%
C. 18.46%
D. 18.95%
Answer: Option B
962. Mandarin Bank advertises 9.5% account that yields 9.84% annually. Find how often the interest is compounded.
A. Daily
B. Monthly
C. Bi-Monthly
D. Quarterly
Answer: Option D
963. A bank pays one percent interest on savings accounts four times a year. The effective annual interest rate is
A. 4.06%
B. 1.00%
C. 2.04%
D. 3.36%
Answer: Option A
964. The effective rate of 14% compounded semi-annually is
A. 14.49%
B. 12.36%
C. 14.94%
D. 14.88%
Answer: Option A
965. An interest rate is quoted as being 7.5% compounded quarterly. What is the effective annual interest rate?
A. 7.71%
B. 7.22%
C. 15.78%
D. 21.81%
Answer: Option A
966. The amount of P12,800 in 4 years at 5% compounded quarterly is
A. P14,785.34
B. P15,614.59
C. P16,311.26
D. P15,847.33
Answer: Option B
967. Find the present worth of a future payment of P100,000 to be made in 10years with an interest of 12% compounded quarterly.
A. P30,444.44
B. P33,000.00
C. P30,655.68
D. P30,546.01
Answer: Option C
968. On his 6th birthday a boy is left an inheritance. The inheritance will be paid in a lump sum of P10,000 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. P6,500
B. P8,600
C. P5,500
D. P7,500
Answer: Option C
969. The amount of P50,000 was deposited in the bank earning at interest of 7.6% 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. P72,475.23
C. P70,374.90
D. P78,536.34
Answer: Option A
970. Alexander Michael owes P25,000.00 due in 1 year and P75,000 due in 4 years. He agrees to pay P50,000 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. P38,025.28
B. P35,021.25
C. P30,500.55
D. P39,021.28
Answer: Option D
971. At an interest rate of 10% compounded annually, how much will a deposit of P1,500 be in 15 years?
A. P6,100.00
B. P6,234.09
C. P 6,265.87
D. P6,437.90
Answer: Option C
972. How long (in years) will it take money to quadruple if it earns 7% compounded semi-annually?
A. 20.15
B. 26.30
C. 33.15
D. 40.30
Answer: Option A
973. In how many year is required for P2,000 to increase by P3,000 if interest at 12% compounded semi-annually?
A. 8
B. 9
C. 10
D. 7
Answer: Option A
974. Consider a deposit of P600.00 to be paid back in one year by P700.00. What are the conditions on the rate of interest, i% per
year compounded annually such that the net present worth of the investment is positive? Assume i is greater than or equal to 0.
A. 0 ≤ i < 14.3%
B. 0 ≤ i < 16.7%
C. 12.5% ≤ i < 14.3%
D. 16.7% ≤ i < 100%
Answer: Option B
975. A company invests P10,000 today to be repaid in 5 year in one lump sum at 12% compounded annually. How much profit in
present day pesos is realized?
A. P7,632
B. P7,236
C. P7,326
D. P7,362
Answer: Option A
976. A firm borrows P2,000 for 6 years at 8%. At the end of 6 years, it renews the loan for the amount due plus P2,000 more for 2
years at 8%. What is the lump sum due?
A. P5,355.00
B. P5,892.00
C. P6,035.00
D. P6,135.00
Answer: Option C
977. A deposit of P1,000 is made in a bank account that pays 8% interest compounded annually. Approximately how much money
will be in the account after 10 years?
A. P1,925.00
B. P1,860.00
C. P2,345.00
D. P2,160.00
Answer: Option D
978. 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. P401,170
B. P421,170
C. P521,170
D. P621,170
Answer: Option D
979. If P500,000 is deposited at a rate of 11.25% compounded monthly, determine the compounded interest after 7 years and 9
months.
A. P660,550
B. P670,650
C. P680,750
D. P690,850
Answer: Option D
980. 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. 3.8%
B. 4.9%
C. 5.0%
D. 5.8%
Answer: Option D
981. If P5,000.00 shall accumulate for 10 years at 8% compounded quarterly, find the compounded interest at the end of 10 years.
A. P6,005.30
B. P6,000.00
C. P6,040.20
D. P6,010.20
Answer: Option C
982. 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. P706.00
B. P500.00
C. P774.00
D. P799.00
Answer: Option A
983. 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. 3%
B. 2.9%
C. 3.5%
D. 4%
Answer: Option C
984. A merchant puts in his P2,000.00 to a small business for a period of six years. With a given interest rate on the investment of
15 % per year, compounded annually, how much will he collect at the end of the sixth year?
A. P4,400.00
B. P4,390.15
C. P4,200.00
D. P4,626.00
Answer: Option D
985. A man expects to receive P25,000 in 8 years. How much is that money worth now considering interest at 8% compounded
quarterly?
A. P13,859.12
B. P13,958.33
C. P13,675.23
D. P13,265.83
Answer: Option D
986. P500,000 was deposited 20.15 years ago at an interest rate of 7% compounded semi-annually. How much is the sum now?
A. P2,000,000
B. P2,000,150
C. P2,000,300
D. P2,000,500
Answer: Option B
987. 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?
A. P12,020
B. P13,030
C. P14,040
D. P15,030
Answer: Option D
988. By the condition of a will, the sum of P20,000 is left to a girl to be held in trust fund by her guardian until it amounts to P50,000.
When will the girl receive the money if the fund is invested at 8% compounded quarterly?
A. 7.98 years
B. 10.34 years
C. 11.57 years
D. 10.45 years
Answer: Option C
989. 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.
A. You will pay P155.00 more if you borrowed from the bank.
B. You will save P55.00 by borrowing from your friend.
C. You will pay P85.00 more if you borrowed from the bank
D. You will pay P55.00 less if you borrowed from the bank.
Answer: Option D
990. What is the present worth of two P100 payments at the end of the third year and fourth year? The annual interest rate is 8%.
A. P153
B. P160
C. P162
D. P127
Answer: Option A
991. Anne 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. P1,121.01
C. P1,152.15
D. P1,128.12
Answer: Option B
992. 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?
A. P10,834.38
B. P10,382.90
C. P10,586.99
D. P10,200.56
Answer: Option A
993. 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. P1,700
B. P2,500
C. P3,400
D. P4,000
Answer: Option A
994. 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. P40,454.29
B. P41,114.29
C. P41,454.29
D. P40,544.29
Answer: Option A
995. 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. P751.00
B. P717.00
C. P715.00
D. P725.00
Answer: Option B
996. 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 is in 6 months. Determine the semi-annual payment.
A. P1,200.00
B. P1,295.05
C. P1,193.90
D. P1,400.45
Answer: Option B
997. 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. P6,919.28
B. P5,674.00
C. P6,074.00
D. P3,296.00
Answer: Option A
998. Mr. Cruz plans to deposit for the education of his 5 years old son, P500 at the of end each month for 10 years at 12% annual
interest compounded monthly. The amount that will be available in two years is
A. P13,000
B. P14,500
C. P13,500
D. P14,000
Answer: Option C
999. 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 ten years?
A. P13,994.17
B. P12,955.21
C. P15,855.45
D. P12,900.25
Answer: Option A
1000. How much must you invest today in order to withdraw P2,000 annually for 10 years if the interest rate is 9%?
A. P12,853.32
B. P12,881.37
C. P12,385. 32
D. P12,835.32
Answer: Option D
Home » GEAS » Questions and Answers in GEAS » Engineering Economics
MCQ in Engineering Economics Part 21 | ECE Board Exam
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(Last Updated On: November 5, 2021)MCQ in Engineering Economics Part 21 | ECE Board Exam
This is the Multiples Choice Questions Part 21 of the Series in Engineering Economics as one of the General Engineering and Applied Sciences (GEAS) topic. In
Preparation for the ECE Board Exam make sure to expose yourself and familiarize in each and every questions compiled here taken from various sources including past
Board Questions in General Engineering and Applied Sciences (GEAS), Engineering Economy Books, Journals and other Engineering Economy References.

Continue Practice Exam Test Questions Part 21 of the Series

➛ MCQ in Engineering Economics Part 20 | ECE Board Exam
Choose the letter of the best answer in each questions.
1001. A person buys a piece of lot for P100,00 down payment 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?
A. P134,666.80
B. P143,999.08
C. P154,696.80
D. P164,969.80
Answer: Option B
1002. 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. P44,982.04
B. P56,143.03
C. P62, 334.62
D. P38,236.04
Answer: Option A
1003. 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. P2,782.85
B. P2,872.58
C. P2,400.00
D. P2,827.58
Answer: Option C
1004. 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. P870.00
B. P846.00
C. P878.00
D. P839.00
Answer: Option D
1005. A house and lot can be acquired by a down payment 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. P810,100
B. P808,811
C. P801,900
D. P805,902
Answer: Option B
1006. 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. 3.81%
C. 5.71%
D. 11.0%
Answer: Option A
1007. 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 if the cost of money is 14% compounded quarterly?
A. P3,802,862
B. P3,702,939
C. P3,502,546
D. P3,602,431
Answer: Option B
1008. A parent on the day the child is born wishes to determine what lump sum would have to be paid into an account bearing interest at 5% compounded annually, in
order to withdraw P20,000 each on the child’s 18th,19th,20th and 21st birthdays. How much is the lump sum amount?

A. P35,941.73
B. P33,941.73
C. P30,941.73
D. P25,941.73
Answer: Option C
1009. 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. P249,000
B. P242,806
C. P248,500
D. P250,400
Answer: Option B
1010. An investment of P350,000 is made to be followed by payments of P200,000 each year for 3 years. What is the annual rate of
return on investment for the project?
A. 41.7%
B. 32.7%
C. 51.1%
D. 15%
Answer: Option B
1011. 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 on the investment?
A. 25.0%
B. 22.5%
C. 23.9%
D. 24.8%
Answer: Option D
1012. A man paid 10% down payment of P200,000 for a house and lot and agreed to pay the balance on monthly 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. 11
B. 9
C. 5
D. 7
Answer: Option C
1013. A manufacturing firm wishes to give each 80 employees a holiday bonus. How much is need to invest monthly for a year at
12% nominal interest rate compounded monthly, so that each employee will receive a P2,000 bonus?
A. P12,608
B. P12,610
C. P12,600
D. P12,300
Answer: Option B
1014. Find the present value in pesos, of a perpetuity of P15,000 payable semi-annually if money is worth 8% compounded
quarterly.
A. P372,537
B. P374,977
C. P373,767
D. P371,287
Answer: Option D
1015. A fund donated by a wealthy person to IIEE to provide annual scholarships to deserving EE students. The fund will grant P5,000 for each of the first five years,
P8,000 for the next 5 years and P10,000 for 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?
A. P101,605.71
B. P101,505.21
C. P100,506.21
D. P 99,601.71
Answer: Option D
1016. 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. P35,983.00
B. P38,378.00
C. P41,453.00
D. P37,519.00
Answer: Option D
1017. A unit of welding machine cost P45,000 with an estimated life of 5 years. Its salvage value is P2,500. Find its depreciation rate
by straight-line method.
A. 17.75%
B. 19.88%
C. 18.89%
D. 15.56%
Answer: Option C
1018. A machine has an initial cost of P50,000 and a salvage value of P10,000 after 10 years. Find the book value after 5 years
using straight-line method.
A. P12,500
B. P30,000
C. P16,400
D. P22,300
Answer: Option B
1019. The initial cost of a paint sand mill, including its installation, is P800,000. The BIR approved life of this machine is 10 years for depreciation. The estimated salvage
value of the mill is P50,000 and the cost of dismantling is estimated to be P15,000. Using straight-line depreciation, what is the annual depreciation charge and what is the
book value of the machine at the end of six years?
A. P74,500; P340,250
B. P76,500; P341,000
C. P76,500; P342,500
D. P77,500; P343,250
Answer: Option B
1020. The cost of equipment is P500,000 and the cost of installation is P30,000. If the salvage value is 10% of the cost of equipment
at the end of 5 years, determine the book value at the end of the fourth year. Use straight-line method.
A. P155,000
B. P140,000
C. P146,000
D. P132,600
Answer: Option C
1021. An asset is purchased for P500,000.00. The salvage value in 25 years is P100,000.00. What is the total depreciation in the
first three years using straight-line method?
A. P48,000
B. P24,000
C. P32,000
D. P16,000
Answer: Option A
1022. A machine has an initial cost of P50,000 and a salvage value of P10,000.00 after 10 years. What is the block value after 5
years using straight line depreciation?
A. P35,000.00
B. P25,000.00
C. P15,500.00
D. P30,000.00
Answer: Option D
1023. An equipment costs P10,000 with a salvage value of P500 at the end of 10 years. Calculate the annual depreciation cost by
sinking fund method at 4% interest.
A. P791.26
B. P950.00
C. P971.12
D. P845.32
Answer: Option A
1024. A machine costing P720,000 is estimated to have a book value of P40,545.73 when retired at the end of 10 years. Depreciation cost is computed using a constant
percentage of the declining book value. What is the annual rate of depreciation in
%?
A. 28
B. 25
C. 16
D. 30
Answer: Option B
1025. A machine costing P45,000 is estimated to have a book value of P4,350 when retired at the end of 6 years. Depreciation cost
is computed using a constant percentage of declining book value. What is the annual rate of depreciation in %?
A. 33.25
B. 32.25
C. 35.25
D. 34.25
Answer: Option B
1026. ABC Corporation makes it a policy that for any new equipment purchased, the annual depreciation cost should not exceed 20% of the first cost at any time with no
salvage value. Determine the length of service life necessary if the depreciation used is the SYD method.

A. 9 years
B. 10 years
C. 12 years
D. 19 years
Answer: Option A
1027. A company purchases an asset for P10,000.00 and plans to keep it for 20 years. If the salvage value is zero at the end of 20th
year, what is the depreciation in the third year? Use SYD method.
A. P1,000
B. P857
C. P937
D. P747
Answer: Option B
1028. A telephone company purchased a microwave radio equipment for P6 million, freight and installation charges amounted to 4% of the purchased price. If the
equipment will be depreciated over a period of 10 years with a salvage value of 8%, determine the depreciation cost during the 5th year using SYD.

A. P626,269.10
B. P622,786.07
C. P638,272.08
D. P627,989.90
Answer: Option A
1029. An asset is purchased for P9,000.00. Its estimated life is 10 years after which it will be sold for P1,000.00. Find the book value
during the first year if sum-of-years digit(SYD) depreciation is used.
A. P8,000
B. P6,500
C. P7,545
D. P6,000
Answer: Option C
1030. The maintenance cost for a sewing machine this year is expected to be P500. The cost will increase P50 each year for the subsequent 9 years. The interest is 8%
compounded annually. What is the approximate present worth of maintenance for the machine over the full 10-year period?

A. P4,700
B. P5,300
C. P4,300
D. P5,500
Answer: Option A
1031. At 6%, find the capitalized cost of a bridge whose cost is P250 M and life is 20 years, if the bridge must be partially rebuilt at a
cost of P100 M at the end of each 20 years.
A. P275.3 M
B. P265.5 M
C. P295.3 M
D. P282.1 M
Answer: Option C
1032. A corporation uses a type of motor truck which costs P5,000 with life of 2 years and final salvage value of P800. How much could the corporation afford to pay for
another type of truck of the same purpose whose life is 3 years with a final salvage value of P1,000. Money is worth 4%.

A. P8,450.66
B. P7,164.37
C. P6,398.24
D. P9,034.56
Answer: Option B
1033. A company must relocate one of its factories in three years. Equipment for the loading dock is being considered for purchase. The original cost is P20,000, the
salvage value of the equipment after three years is P8,0000. The company’s rate of return on the money is 10%. Determine the capital recovery rate per year.

A. P5,115
B. P4,946
C. P5,625
D. P4,805
Answer: Option C
1034.The annual maintenance cost of a machine shop is P69,994. If the cost of making a forging is P56 per unit and its selling price
is P135 per forged unit, find the number of units to be forged to break-even.
A. 886 units
B. 885 units
C. 688 units
D. 668 units
Answer: Option A
1035. A manufacturer produces certain items at a labor cost of P115 each, material cost of P76 each and a variable cost of P2.32 each. If the item has a unit price of P600,
how many number of units must be manufactured each month for the manufacturer to break even if the monthly overhead is P428,000?

A. 1053
B. 1138
C. 946
D. 1232
Answer: Option A
1036. Steel drum manufacturer incurs a yearly fixed operating cost of $200,000. Each drum manufactured cost $160 to produce and
sells $200. What is the manufacturer’s break-even sales volume in drums per year?
A.1250
B. 2500
C. 5000
D. 1000
Answer: Option C
1037. JRT Industries manufactures automatic voltage regulator at a labor cost of P85.00 per unit and material cost of P350.00 per unit. The fixed charges on the business
are P15,000 per month and the variable costs are P20.00 per unit. If the automatic voltage regulators are sold to retailers at P580.00 each, how many units must be
produced and sold per month to breakeven?
A. 104
B. 200
C. 120
D. 150
Answer: Option C
1038. Compute for the number of locks that an ice plant must be able to sell per month to break even based on the following data:
Cost of electricity per block – P20.00
Tax to be paid per block – P2.00
Real estate Tax – P3,500.00 per month
Salaries and Wages – P25,000.00 per month
Others – P12,000.00 per month
Selling price of ice – P55.00 per block
A.1228
B. 1285
C. 1373
D. 1312
Answer: Option A
1039. The annual maintenance cost of a machine is P70,000. If the cost of making a forging is P56 and its selling price is P125 per
forged unit. Find the number of units to be forged to break even.
A. 1015 units
B. 985 units
C. 1100 units
D. 1000 units
Answer: Option A
1040. XYZ Corporation manufactures bookcases that sell for P65.00 each. It costs XYZ Corporation P35,000 per year to operate its plant. This sum includes rent,
depreciation charges on equipment, and salary payments. If the cost to produce one bookcase is P50.00, how many cases must be sold each year for XYZ to avoid taking
a loss?
A. 2334
B. 539
C. 750
D. 2333
Answer: Option A
1041. A company which manufactures electric motors has a production capacity of 200 motors a month. The variable costs are P150.00 per motor. The average selling
price of the motors is P275.00. Fixed costs of the company amount to P20,000 per month which includes taxes. The number of motors that must be sold each month to
break even is closest to:
A. 40
B. 150
C. 80
D. 160
Answer: Option D
1042. A price tag of P1200 is specified if paid within 60 days but offers 3% discount for cash in 30 days. Find the rate of interest.
a. 37.11%
b. 38.51 %
c. 40.21 %
d. 39.31 %
Answer: Option A
1043. Mr. Almagro made a money market of P1 000 000 for 30 days at 7.5% per year. If the withholding tax is 20%, what is the net
interest that he will receive at the end of the month?
a. P3 000
b. P4 000
c. P6 000
d. P5 000
Answer: Option D
1044. 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. 12.25
b. 11.75
c. 12.75
d. 11.95
Answer: Option B
1045. 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 500.10
c. P13 498.60
d. P13 439.16
Answer: Option C
1046. A man expects to receive P25 000 in 8 years. How much is that worth now considering interest at 8% compounded quarterly?
a. P13 859.12
b. P13 958.33
c. P13 675.23
d. P13 265.83
Answer: Option D
1047. P200 000 was deposited for a period of 4 years and 6 months and bears on interest of P85 649.25. What is the rate of interest
if it is compounded quarterly?
a. 8%
b. 7%
c. 6%
d. 5%
Answer: Option A
1048. Find the time required for a sum of money to triple itself at 5% per annum compounded continuously?
a. 18.23 yrs.
b. 21.97 yrs.
c. 23.36 yrs.
d. 25.34 yrs.
Answer: Option B
1049. If the nominal interest is 12% compounded continuously, compute the effective rate of annual interest.
a. 12.40%
b. 11.26%
c. 12.75%
d. 11.55%
Answer: Option C
1050. If a sum of money triples in a certain period of time at a given rate of interest, compute the value of the single payment
present worth factor.
a. 0.292
b. 0.333
c. 1.962
d. 3
Answer: Option B
1051. 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.
a. 37.11%
b. 38.51%
c. 40.21%
d. 39.31%
Answer: Option A
1052. It is the practice of almost all bank in the Philippines that when they grant a loan, the interest for 1 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 the bank and the P80000 was approved at an interest rate of 14% of which
P11200 was deducted and you were given ac check of P68800. Since you have to pay the amount of P80000 one year after, what then will be the effective interest rate?

a. 16.28%
b. 38.51%
c. 17.30%
d. 39.31%
Answer: Option A
1053. Mr. J. Dela Cruz borrowed money from the bank. He received from the bank P1,340.00 and promised to pay P1,500.00 at the end of 9 months. Determine the
simple interest rate and the corresponding discount rate or often referred to as the “Banker’s Discount”.

a. 12.95% ; 17.33%
b. 15.92% ; 13.73%
c. 18.28% ; 13.12%
d. 19.25% ; 13.33%
Answer: Option B
1054. A man borrowed from the bank under a promissory note that he signed in the amount of P25000.00 for a period of 1 year. He received only the amount of
P21,915.00 after the bank collected 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?
a. 10.32%
b. 13.64%
c. 16.43%
d. 18.37%
Answer: Option B
1055. Agnes Abanilla was granted a loan of P20,000 by her employer CPM Industrial Fabricator 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 discounted at once, find the proceeds in the note.

a. P18,000
b. P19,000
c. P18,800
d. P18,400
Answer: Option C
1056. P4000 is borrowed for 75 days at 16% per annum simple interest. How much will be due at the end of 75 days?
a. P4186.43
b. P5124.54
c. P4133.33
d. P5625.43
Answer: Option C
1057. Mr. Almagro made a money market placement of P1,000,000 for 30 days at 7.5% per year. If withholding tax is 20%, what is
the net interest that Mr. Almagro will receive at the end of the month?
a. P3,000
b. P4,000
c. P6,000
d. P5,000
Answer: Option D
1058. 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 can afford to borrow money in order to take advantage of the discount?
a. 18.4%
b. 19.6%
c. 20.9%
d. 21.4%
Answer: Option D
1059. In buying a computer disk, the buyer was offered the options of paying P250 cash at the end of 30 days or P270 at the end of
120 days. At what rate is the buyer paying simple interest if he agree to pay at the end of 120days?
a. 32%
b.40%
c. 28%
d. 25%
Answer: Option A
1060. On March 1, 1996 Mr. Almagro obtains a loan of P1500 from Mr. Abella and signs a note promising to pay the principal and accumulated simple interest at the rate
of 5% at the end of 120 days. On May 15, 1996, Mr. Abella discounts the note at the bank whose discount rate is 6%. What does he receive?

a. P2,201.48
b. P1,123.29
c. P1,513.56
d. P938.20
Answer: Option C
1061. 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. 12.25
b. 11.75
c. 12.75
d. 11.95
Answer: Option B
1062. If you borrowed money from your friend with simple interest of 12%, find the present worth of P50,000 which is due at the end
of 7 months.
a. P46,200
b. P44,893
c. P46,729
d. P45,789
Answer: Option C
1063. A man borrowed P2000 from a bank and promise to pay the amount for 1year. He received 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. 4% ; 4.17%
b. 3% ; 3.17%
c. 4% ; 4.71%
d. 3% ; 3.71%
Answer: Option A
1064. 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.
a. 64.6%
b. 65.6%
c. 66.6%
d. 67.6%
Answer: Option C
1065. 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.
a. 18.4%
b. 19.6%
c. 15.8%
d. 16.4%
Answer: Option C
1066. Compute the discount if P2000 is discounted for 6 months at 8% simple interest.
a. P29.67
b. P67.29
c. P76.92
d. P92.76
Answer: Option C
1067. The amount of P12,800 in 4years at 5% compounded quarterly is            .
a. P14,785.34
b. P15,614.59
c. P16,311.26
d. P15,847.33
Answer: Option B
1068. 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 respectively. Determine the amount of money that he received from the bank.

a. P1403.68
b. P1340.38
c. P1102.37
d. P1030.28
Answer: Option A
1069. 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. P13,500.10
c. P13,498.60
d. P13,439.16
Answer: Option C
1070. BY the condition of a will, the sum of P2000 is left to a girl to be held in trust fund by her guardian until it amount to
P50000.00. When will the girl receive the money of the fund is invested at 8% compounded quarterly?
a. 7.98 years
b. 10.34 years
c. 11.57 years
d. 10.45 years
Answer: Option C
1071. A man expects to receive P25,000 in 8 years. How much is that worth now considering interest at 8% compounded quarterly?
a. P13,859.12
b. P13,958.33
c. P13,675.23
d. P13,265.83
Answer: Option D
1072. P500,000 was deposited at an interest of 6% compounded quarterly. Compute the compound interest after 4 years and 9
months.
a. P163,475.37
b. P178,362.37
c. P158,270.37
d. P183,327.37
Answer: Option A
1073. If the nominal interest rate is 3%, how much is P5000 worth in 10 years in a continuously compounded account?
a. P5750
b. P6750
c. P7500
d. P6350
Answer: Option B
1074. P200,000 was deposited for a period of 4 years and 6 months and bears on interest of P85649.25. What is the rate of interest
if it is compounded quarterly?
a. 8%
b. 6%
c. 7%
d. 5%
Answer: Option A
1075. How many years will P100,000 earn a compound interest of P50,000 if the interest rate is 9% compounded quarterly?
a. 3.25 years
b. 4.55 years
c. 5.86 years
d. 2.11 years
Answer: Option B
1076. 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. P200,000
b. P180,000
c. P240,000
d. P260,000
Answer: Option A
For Problems 1077-1079:
When compounded Bi-monthly, P15000 becomes P22,318.30 after 5 years.
1077. What is the nominal rate of interest?
a. 7%
b. 8%
c. 9%
d. 10%
Answer: Option B
1078. What is the equivalent rate if it is compounded quarterly?
a. 7.03%
b. 8.03%
c. 9.03%
d. 10.03%
Answer: Option B
1079. What is the effective rate if it is compounded quarterly?
a. 7.28%
b. 8.28%
c. 9.28%
d. 10.28%
Answer: Option B
1080. How will it take a money to double itself if invested at 5% compounded annually?
a. 12.2 years
b. 13.2 years
c. 14.2 years
d. 15.2 years
Answer: Option C
1081. Compute the effective annual interest rate which is equivalent to 5% nominal annual interest compounded continuously.
a. 5.13%
b. 4.94%
c. 5.26%
d. 4.90%
Answer: Option A
1082. Find the time required for a sum of money to triple itself at 5% per annum compounded continuously.
a. 21.97 years
b. 25.34 years
c. 18.23 years
d. 23.36 years
Answer: Option A
1083. A man wishes to have P40,000 in a certain fund at the end of 8 years. How much should he invest in a fund that will pay 6%
compounded continuously?
a. P24,751.34
b. P36,421.44
c. P28,864.36
d. P30,468.42
Answer: Option A
1084. If the effective annual interest rate is 4%, compute the equivalent nominal annual interest compounded continuously.
a. 3.80%
b. 4.10%
c. 3.92%
d. 4.09%
Answer: Option C
1085. What is the nominal rate of interest compounded continuously for 10 years if the compound amount factor is equal to
1.34986?
a. 3%
b. 4%
c. 5%
d. 6%
Answer: Option A
1086. American Express Corp. charges 1.5% interest per month, compounded continuously on the unpaid balance purchases made
on this credit card. Compute the effective rate of interest.
a. 19.72%
b. 20.25%
c. 21.20%
d. 19.90%
Answer: Option A
1087. If the nominal interest is 12% compounded continuously, compute the effective annual rate if interest.
a. 12.40%
b. 11.26%
c. 12.75%
d. 11.55%
Answer: Option C
1088. Compute the difference in the future amount of P500 compounded annually at nominal rate of 5% and if it is compounded
continuously for 5 years at the same rate.
a. P3.87
b. P4.21
c. P5.48
d. P6.25
Answer: Option A
1089. If the effective rate is 24%, what nominal rate of interest is charged for a continuously compounded loan?
a. 21.51%
b. 22.35%
c. 23.25%
d. 21.90%
Answer: Option A
1090. 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. 5%
c. 6%
d. 7%
Answer: Option C
1091. 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. P155
b. P100
c. P50
d. same
Answer: Option A
1092. Find the discount if P2,000 is discounted for 6 months at 8% compounded quarterly.
a. P76.92
b. P80.00
c. P77.66
d. P78.42
Answer: Option C
1093. If a sum of money triples in a certain period of time at a given rate interest, compute the value of the single payment present
worth factor.
a. 0.333
b. 3.000
c. 0.292
d. 1.962
Answer: Option A
1094. If the single payment amount factor for a period of 5 years is 1.33822. What is the nearest value of the interest rate?
a. 8%
b. 7%
c. 5%
d. 6%
Answer: Option D
1095. If the single payment present worth factor for a period of 8 years is equal to 0.58201, compute the nearest value of the rate of
interest for that period.
a. 6%
b. 7%
c. 5%
d. 8%
Answer: Option B
1096. If money is worth 8% compounded quarterly, compute the single payment amount factor for a period of 6 years.
a. 1.60844
b. 0.62172
c. 1.70241
d. 0.53162
Answer: Option A
1097. A sum of P1,000 is invested now and left for 8 years, at which time the principal is 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. P507.42
b. P705.42
c. P750.42
d. P425.07
Answer: Option B
For problems 1098-1100:
Compute the interest for an amount of P200,000 for a period of 8 years.
1098. If it was made at a simple interest rate of 16% .
a. P274,000
b. P265,000
c. P256,000
d. P247,000
Answer: Option C
1099. If it was made at 16% compounded bi-monthly.
a. P507,267.28
b. P507,365.96
c. P407,283.01
d. P459,923.44
Answer: Option B
1100. If it was made at 16% compounded continuously.
a. P422,462.64
b. P507,233.24
c. P524,242.46
d. P519,327.95
Answer: Option D
1101. Find the value of x, (F/P, x, 6) if F/P compounded quarterly is equal to 1.612226.
a. 8%
b. 7%
c. 6%
d. 5%
Answer: Option A
1102. Find the value of y, (P/F, 6%, y) if P/F compounded bi-monthly is equal to 0.787566.
a. 7 years
b. 6 years
c. 5 years
d. 4 years
Answer: Option D
1103. Find the rate of interest if compound amount factor compounded bi-monthly for 5 years is equal to 1.487887.
a. 7%
b. 8%
c. 5%
d. 6%
Answer: Option B
1104. Compute the nominal rate for a period of 6 years for an effective rate of 8.33% if it is compounded continuously.
a. 5%
b. 6%
c. 7%
d. 8%
Answer: Option D
1105. Compute the equivalent compound amount factor if it is compounded continuously.
a. 1.61607
b. 1.24282
c. 1.24532
d. 0.24245
Answer: Option A
1106. Compute the equivalent present worth factor if it is compounded continuously.
a. 1.249347
b. 1.214359
c. 1.243248
d. 0.616783
Answer: Option D
1107. 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. 8 years
c. 5 years
d. 6 years
Answer: Option B
1108. 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. 6.25 years
c. 7.25 years
d. 8.25 years
Answer: Option B
1109. A man loan P2000 from the bank. How long would it take in years if it was made at 8% compounded continuously.
a. 7.18 years
b. 8.18 years
c. 5.18 years
d. 6.18 years
Answer: Option D
1110. 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.
a. 11% ; 12.623% ; 11.42%
b. 12% ; 12.616% ; 12.06%
c. 12% ; 11.06% ; 12.724%
d. 11% ; 11.664% ; 11.93%
Answer: Option B
1111. How long would it take your money to double itself if it is invested at 6% simple interest, compounded semi-quarterly, and
compounded continuously?
a. 12.67 yrs ; 11.2yrs ; 15.05 yrs
b. 16.67 yrs ; 11.6yrs ; 11.55 yrs
c. 18.67 yrs ; 11.6yrs ; 11.24 yrs
d. 17.67 yrs ; 10.2yrs ; 11.45 yrs
Answer: Option B
For problems 1112-1114:
An amount of P50,000 was invested for 3 years.
1112. Compute its interest at the end of 3 years if it is invested at 10% simple interest.
a. P16,550.00
b. P17,492.94
c. P15,000.00
d. P14,242.15
Answer: Option C
1113. Compute for its compound interest if it is invested at 10% compounded annually.
a. P16,550.00
b. P17,492.94
c. P15,000.00
d. P14,242.15
Answer: Option A
1114. Compute its interest if it is invested at 10% compounded continuously.
a. P16,550.00
b. P17,492.94
c. P15,000.00
d. P14,242.15
Answer: Option B
For Problems 1115-1117:
P200,000 was deposited for a period of 4 yrs. And 6 months and bears on interest of P85,659.25.
1115. What is the nominal rate of interest if it is compounded quarterly?
a. 8.00%
b. 8.24%
c. 7.00%
d. 7.96%
Answer: Option A
1116. What is the actual rate of interest?
a. 8.00%
b. 8.24%
c. 7.00%
d. 7.96%
Answer: Option B
1117. What is the equivalent nominal rate if it is compounded semi-quarterly?
a. 8.00%
b. 8.24%
c. 7.00%
d. 7.96%
Answer: Option D
1118. What is the value of (F/P, 8%, 6) if it is compounded semi-quarterly.
a. 0.524273541
b. 0.787566127
c. 1.487886717
d. 1.612226000
Answer: Option D
1119. What is the value of (P/F, 6%, 4) if it is compounded bi-monthly.
a. 0.524273541
b. 0.787566127
c. 1.487886717
d. 1.612226000
Answer: Option B
1120. What is the single payment compound amount factor for 8% compounded bi-monthly for 5 years.
a. 0.524273541
b. 0.787566127
c. 1.487886717
d. 1.612226000
Answer: Option C
For Problems 1121-1123:
If money is invested at a nominal rate of interest of 8% for a period of 4 years.
1121. What is the effective rate if it is compounded continuously?
a. 8.33%
b. 8.93%
c. 9.33%
d. 9.93%
Answer: Option A
1122. What is the value of the compound amount factor if it is compounded continuously?
a. 1.377128
b. 0.214212
c. 1.424231
d. 0.122416
Answer: Option A
1123. What is the value of the present worth factor if it is compounded continuously?
a. 1. 272441
b. 1.726419
c. 0.272441
d. 0.726149
Answer: Option D
1124. If the single payment amount factor for a period of 5 years is 1.33822, what is the nominal rate of interest?
a. 6.00%
b. 6.92%
c. 7.00%
d. 7.92%
Answer: Option A
1125. What is the effective rate of interest if it is compounded semi-annually of problem# 1124?
a. 5.00%
b. 6.92%
c. 7.24%
d. 6.09%
Answer: Option D
1126. What is the equivalent nominal rate if it is compounded quarterly of problem# 1124?
a. 6.12%
b. 5.43%
c. 4.24%
d. 5.87%
Answer: Option D
1127. Money was invested at x% compounded quarterly. If it takes money to quadruple in 17.5 years, find the value of x.
a. 6.23%
b. 5.92%
c. 8.00%
d. 9.78%
Answer: Option C
1128. What is the actual interest rate of problem# 1127?
a. 7.24%
b. 8.24%
c. 7.92%
d. 8.87%
Answer: Option B
1129.) What is the equivalent rate if problem# 1127 is compounded daily?
a. 7.24%
b. 8.24%
c. 7.92%
d. 8.87%
Answer: Option C
For Problems 1130-1132:
A businessman loaned P500,000 from a local bank that charges an interest rate of 12%.
1130. How much is he going to pay at the end of 5 years if it was made at 12% simple interest?
a. P800,000.00
b. P823,243.09
c. P911,059.20
d. P907,009.21
Answer: Option A
1131. How much is he going to pay at the end of 5 years if it was made at 12% compound semi-quarterly?
a. P800,000.00
b. P823,243.09
c. P911,059.20
d. P907,009.21
Answer: Option D
1132. How much is he going to pay at the end of 5 years if it was made at 12% compound continuously?
a. P800,000.00
b. P823,243.09
c. P911,059.20
d. P907,009.21
Answer: Option C
1133. 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?
a. P43,214.24
b. P43.242.24
c. P44,086.60
d. P44,215.60
Answer: Option C
1134. 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?
a. 4.56 years
b. 4.23 years
c. 3.45 years
d. 3.64 years
Answer: Option A
1135. 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?
a. 9.5%
b. 8.21%
c. 6.35%
d. 7.12%
Answer: Option A
1136. Which of these gives the lowest effective rate of interest?
a. 12.35% compounded annually
b. 11.9% compounded semi-annually
c. 12.2% compounded quarterly
d. 11.6% compounded monthly
Answer: Option D
1137. It takes 20.15 years to quadruple your money if it is invested at x% compounded semi-annually. Find the value of x.
a. 8%
b. 6%
c. 7%
d. 5%
Answer: Option C
1138. It takes 13.87 years to treble the money at the rate of x% compounded quarterly. Compute the value of x.
a. 5%
b. 6%
c. 7%
d. 8%
Answer: Option D
1139. Money was invested at x% compounded quarterly. If it takes the money into quadruple in 17.5 years, find the value of x.
a. 8%
b. 6%
c. 7%
d. 5%
Answer: Option A
1140. 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?
a. 4.9%
b. 5.8%
c. 5.0%
d. 3.8%
Answer: Option B
1141. 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.
a. pay P155 more if you borrowed from the bank
b. save P55 by borrowing from your friend
c. pay P85 more if you borrowed from the bank
b. save P95 by borrowing from your friend
Answer: Option B
1142. Find the present worth of a future payment of P1000,000 to be made in 10 years with an interest of 12% compounded
quarterly.
a. P30,444.44
b. P33,000.00
c. P30,655.68
d. P30,546.01
Answer: Option C
1143.) 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?
a. P95,324.95
b. P82938.28
c. P68743.24
d. P56244.75
Answer: Option B
1144. The effective rate of interest of 14% compounded semi-annually is:
a. 14.49%
b. 14.36%
c. 14.94%
d. 14.88%
Answer: Option A
1145. 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.
a. P71,781.47
b. P72,475.23
c. P70,374.90
d. P78,536.34
Answer: Option A
1146. What is the effective rate corresponding to 18% compounded daily? Take 1 year is equal to 360 days.
a. 18.35%
b. 19.39%
c. 18.10%
d. 19.72%
Answer: Option D
1147. 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.
a. 3.00% and 3.02%
b. 4.29% and 4.32%
c. 2.30% and 2.76%
d. 3.97% and 3.95%
Answer: Option A
1148. Convert 12% semi-annually to compounded quarterly.
a. 19.23%
b. 23.56%
c. 14.67%
d. 11.83%
Answer: Option D
1149. What is the corresponding effective interest rate of 18% compounded semi-quarterly?
a. 19.25%
b. 19.48%
c. 18.46%
d. 18.95%
Answer: Option B
1150. If P5000 shall accumulate for 10 years at 8% compounded quarterly, find the compounded interest at the end of 10 years.
a. P6,005.30
b. P6,000.00
c. P6,040.20
d. P6,010.20
Answer: Option C
1151. 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?
a. P14,842.40
b. P16,712.03
c. P12,316.40
d. P15,382.60
Answer: Option B
1152. How long (in years) will it take the money to quadruple if it earns 7% compounded semi-annually?
a. 26.30 years
b. 40.30 years
c. 33.15 years
d. 20.15 years
Answer: Option D
1153. 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?
a. P421,170
b. P521,170
c. P401,170
d. P621,170
Answer: Option D
1154. If P500,000 is deposited at a rate of 11.25% compounded monthly, determine the compounded interest after 7 years and 9
months.
a. P690,849
b. P670,258
c. P680,686
d. P660,592
Answer: Option A
1155. 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. 3 years
c. 5 years
d. 6 years
Answer: Option C
1156. A bank is advertising 9.5% accounts that yields 9.84% annually. How often is the interest compounded?
a. monthly
b. bi-monthly
c. quarterly
d. daily
Answer: Option C
1157. 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.
a. P120,289.51
b. P129,382.38
c. P110,297.27
d. P122,265.69
Answer: Option A
1158. 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 at maturity?
a. P15,386.00
b. P15,030.00
c. P13,382.00
d. P16,653.00
Answer: Option B
1159. 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?

a. P15,030.00
b. P18,548.39
c. P12,382.00
d. P15,386.00
Answer: Option B
1160. If the inflation rate is 6%, cost of money is 10%, what interest rate will take care of inflation and the cost of money?
a. 16.6%
b. 15.5%
c. 17.7%
d. 14.4%
Answer: Option A
1161. 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?

a. 2.94%
b. 3.16%
c. 4.25%
d. 5.16%
Answer: Option A
1162. 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%?
a. 5%
b. 6%
c. 7%
d. 4%
Answer: Option B
1163. 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?
a. 6.62%
b. 5.66%
c. 7.67%
d. 4.64%
Answer: Option B
1164. An engineer bought an equipment for P500,000. Other expenses including installations amounted to P30,000. At the end of its estimated useful life of 10 years, the
salvage value will be 10% of the first cost. Using straight line method of depreciation, what is the book value after 5 years?

a. P214,242
b. P282,242
c. P242,241
d. P291,500
Answer: Option D
1165. A small machine costing P80,000 has a salvage value of x at the end of its life of 5 years. The book value at the end of the 4th
year is P22,400. What is the value of x using the straight line method depreciation?
a. P6000
b. P7000
c. P8000
d. P9000
Answer: Option C
1166. A machine has a salvage value of P12,000 at the end of its useful life of 6 years. The book value at the end of 5 years is
P30,833.33. Using a straight line method of depreciation, what is the first cost of the machine?
a. P125,500
b. P135,500
c. P125,000
d. P135,000
Answer: Option C
1167. A manufacturing plant was built at a cost of P5M and is estimated to have a life of 20 years with a salvage value of P1M. A certain equipment worth P570,000 was
installed at a cost of P80,000 is expected to operate economically for 15 years with a salvage value of P50,000. Determine the book value of the plant and equipment after
10 years, use straight line depreciation method.

a. P3,250,000
b. P3,750,000
c. P4,250,000
d. P4,500,000
Answer: Option A
1168. A printing equipment costs P73,500 has a life expectancy of 8 years and has a salvage value of P3,500 at the end of its life.
The book value at the end of x years is equal to P38,500. Using straight line method of depreciation, solve for the value of x.
a. 5 years
b. 4 years
c. 6 years
d. 3 years
Answer: Option B
1169. The cost of the printing equipment is P500,000 and the cost of handling and installation is P30,000. If the book value of the equipment at the end of the 3rd year is
P242,000 and the life of the equipment is assumed to be 5 years, determine the salvage value of this equipment at the end of 5 years.

a. P50,000
b. P60,000
c. P53,000
d. P64,000
Answer: Option A
1170. An engineer bought an equipment for P500,000. He spent an additional amount of P30,000 for installation and other expenses. The salvage value is 10% of the first
cost. If the book value at the end of 5 years will be P291,500 using straight line method of depreciation, compute the useful life of the equipment in years.

a. 6 years
b. 8 years
c. 10 years
d. 15 years
Answer: Option C
1171. The cost of equipment is P500,000 and the cost of installation is P30,000. If the salvage value is 10% of the cost of equipment
at the end of 5 years, determine the book value at the end of the fourth year. Use straight line method.
a. P155,000
b. P140,000
c. P146,000
d. P132,600
Answer: Option C
For Problems 1172-1174:
The first cost of a machine is P1,800,000 with a salvage value of P300,000 at the end of its life of 5 years. Determine the total
depreciation after 3 years.
1172. Using Straight Line Method
a. P800,000
b. P600,000
c. P900,000
d. P700,000
Answer: Option C
1173. Using Sum of Years Digit Method
a. P1,150,000
b. P1,200,000
c. P1,300,000
d. P1,350,600
Answer: Option B
1174. Using Constant Percentage Method
a. P1,355,024.24
b. P1,185,769.76
c. P1,246,422.53
d. P1,432,624.84
Answer: Option B
1175. An asset is purchased for P9,000.00. Its estimated economic life is 10 years after which it will be sold for P1,000.00. Find the
depreciation in the first three years using straight line method.
a. P2,500
b. P2,400
c. P3,000
d. P2,000
Answer: Option B
1176. The purchase of a motor for P6000 and a generator for P4000 will allow the company to produce its own energy. The configuration can be assembled for P500. The
service will operate for 1600 hours per year for 10 years. The maintenance cost is P300 per year, and cost to operate is P0.85 per hour for fuel and related cost. Using
straight line depreciation, what is the annual cost for the operation? There is a P400 salvage value for the system at the end of 10 year.

a. P2,710
b. P2,480
c. P2,630
d. P2,670
Answer: Option D
1177. A machine has an initial cost of P50,00.00 and a salvage value of P10,000.00 after 10 years. What is the straight line method
depreciation rate as a percentage of the initial cost?
a. 10%
b. 8%
c. 12%
d. 9%
Answer: Option B
1178. A machine has an initial cost of P50,00.00 and a salvage value of P10,000.00 after 10 years. What is the book value after 5
years using straight line method depreciation rate?
a. P35,000
b. P25,000
c. P15,500
d. P30,000
Answer: Option D
1179. A machine has a first of P80,000 and a salvage of P2,000 at the end of its life of 10 years. Find the book value at the end of
the 6th year using straight line method of depreciation.
a. P33,200
b. P35,400
c. P34,300
d. P32,900
Answer: Option A
1180. An asset is purchased for P90,000.00. Its estimated life is 10 years after which it will be sold for P1,000.00. Find the book
value during the first year if Sum of the Years Digits(SYD) depreciation is used.
a. P7,545.45
b. P2,980.24
c. P5,245.92
d. P6,259.98
Answer: Option A
1181. A telephone company purchased a microwave radio equipment for P6M. Freight and installation charges amounted to 3% of the purchased price. If the equipment
shall be depreciated over a period of 8 years with a salvage value of 5%, determine the depreciation charge during the 5th year using the Sum of Year Digit Method.

a. P756,632.78
b. P957,902.56
c. P652,333.33
d. P845, 935.76
Answer: Option C
1182. A consortium of international communications companies contracted for the purchase and installation of a fiber optic cable linking two major Asian cities at a total
cost of P960M. This amount includes freight and installation charges at 10% of the above total contract price. If the cable depreciated over a period of 15 years with zero
salvage value, what is the depreciation charge during the 8th year using the sum of year digits method?

a. P64 M
b. P23 M
c. P80 M
d. P76 M
Answer: Option A
1183. A machine cost P7,350 has a life of 8 years and has a salvage value of P350 at the end of 8 years. Determine its book value
at the end of 4 years using sum years digit method.
a. P3,476.90
b. P2,294.44
c. P6,543.21
d. P5,455.01
Answer: Option B
1184. A certain equipment costs P7,000 has an economic life of n years and a salvage value P350 at the end of n years. If the book value at the end of 4 years is equal to
P2197.22, compute for the economic life of the equipment using the sum of years digit method.

a. 10 years
b. 16 years
c. 8 years
d. 11 years
Answer: Option C
1185. A company purchased an asset for P10000 and plans to keep it for 20 years. If the salvage value is zero at the end of the 20th
year, what is the depreciation in the third year? Use sum of years digit method.
a. P1000
b. P857
c. P938
d. P747
Answer: Option B
1186. An equipment costs P7000 and has a life of 8 years and salvage value of x after 8 years. If the book value of the equipment at
the 4th year is equal to P2197.22, compute the salvage value x using the sum of years digit method.
a. P594
b. P430
c. P350
d. P290
Answer: Option C
1187. ABC Corporation makes it policy that for every new equipment purchased, the annual depreciation should not exceed 20% of
the first cost at any time without salvage value. Determine the length of service if the depreciation used is the SYD Method.
a. 9 years
b. 10 years
c. 12 years
d. 19 years
Answer: Option D
1188. A machine having a certain first cost has a life of 10 years and a salvage value of 6.633% of the first cost at the end of 10 years. If it has a book value of P58,914 at
the end of the 6th year, how much is the first cost of the machine if the constant percentage of declining value is used in the computation for its depreciation.(Matheson’s
Method)
a. P600,000
b. P300,000
c. P100,000
d. P900,000
Answer: Option B
1189. A machine costing P720,000 is estimated to have a life of 10 years. If the annual rate of depreciation is 25%, determine the
total depreciation using a constant percentage of the declining balance method.
a. P679,454.27
b. P432,725.45
c. P532,825.73
d. P764,243.33
Answer: Option A
1190. An earth moving equipment that cost P90,000 will have an estimated salvage value of P18,000 at the end of 8 years. Using
double-declining balance method, compute the book value and the total depreciation at the end of the 5th year.
a. P21,357.42 ; P68,642.58
b. P15,830.34 ; P74,169.66
c. P24,362.48 ; P65,637.52
d. P19,442.78 ; P70,557.22
Answer: Option A
1191. A certain office equipment has a first cost of P20,000 and has a salvage value of P1,000 at the end of 10 years. Determine the
depreciation at the end of the 6th year using Sinking fund method at 3% interest.
a. P10,720
b. P12,420
c. P11,680
d. P9,840
Answer: Option B
1192. An equipment which cost P200,000 has a useful life of 8 years with a salvage value of P25,000 at the end of its useful life. If
the depreciation at the first year is P21,875, what method is used in the calculation of depreciation?
a. Straight Line
b. Sinking Fund
c. Declining Balance
d. Sum of Years Digit
Answer: Option A
1193. An equipment costs P8,000 has an economic life of 8 years and salvage value of P400 at the end of 8 years. The first year
depreciation amounts to P1,688.89. What method is used in the calculation of the depreciation?
a. Straight Line
b. Sinking Fund
c. Declining Balance
d. Sum of Years Digit
Answer: Option D
1194. The original cost of a certain machine is P150,000 and has an economic life of 8 years with a salvage value of P9,000 at that
time. If the depreciation of the first year is equal to P44,475, what method is used in the calculation of the depreciation?
a. Straight Line
b. Sinking Fund
c. Declining Balance
d. Sum of Years Digit
Answer: Option C
1195. A machine has a first cost of P140,000 and a life of 8 years with a salvage value of P10,000 at the end of its useful life. If the
depreciation at the first year amounts to P35,000, what method is used in the calculation of depreciation?
a. Double Declining Balance
b. Declining Balance
c. Straight Line
d. Sum of Years Digit
Answer: Option A
1196. A hydraulic machine cost P180,000 and has a salvage value of P15,000 at the end of its useful life which is 12 years. If the
depreciation at the first year is P9,780.71, what method is used in computing the depreciation. Assume money is worth 6% annually.
a. Straight Line
b. Sinking Fund
c. Declining Balance
d. Sum of Years Digit
Answer: Option B
1197. An equipment costs P480,000 and has a salvage value of 10% of its cost at the end of its economic life of 35,000 operating
hours. In the first year, it was used for 4,000 hours. Determine its book value at the end of the first year.
a. P430,629.00
b. P380,420.00
c. P418,360.00
d. P376,420.00
Answer: Option A
1198. An equipment costs P480,000 and has a salvage value of 10% of its cost at the end of its economic life of 36,000 operating hours in a period of 5 years. In the first
year of service, it was used for 12,000 hours. If at the end of the 2nd year it was used for 15,000 hours, find the depreciation at the second year.

a. P180,000
b. P160,000
c. P190,000
d. P150,000
Answer: Option A
1199. A certain machine cost P40,000 and has a life of 4 years and a salvage value of P5000. The production output of this machine in units per year is 1000 units for the
first year, 2000 units for the second year, 3000 units for the third year, and 4000 units for the fourth year. If the units produced are in uniform quality, what is the
depreciation charge at the end of the fourth year.
a. P14,000
b. P13,000
c. P15,000
d. P16,000
Answer: Option A
1200. A lathe machine costs P300,000 brand new with a salvage value of x pesos. The machine is expected to last for 28500 hours in a period of 5 years. In the first year
of service it was used for 8000 hours. If the book value at the end of the first year is P220,000, compute for the salvage value x in pesos.

a. P15,000
b. P18,000
c. P12,000
d. P20,000
Answer: Option A
1201. A certain machine cost P40,000 and has a life of 4 years and a salvage value of P5000. The production output of this machine in units per year is first year 1800
units, second year 2200 units, third year 3000, and fourth year 4000 units. If the units produced are of uniform quality, what is the depreciation charge at the end of 4th
year?
a. P12,727.27
b. P15,350.23
c. P16,420.43
d. P17,200.98
Answer: Option A
1202. A lathe machine cost P300,000 with a salvage value of P15,000 is expected to last for 285000 hours in a period of 5 years. In
the first year of service it was used for 8000 hours. Compute the book value of the machine at the end of the first year.
a. P292,000
b. 200,000
c. P250,000
d. P323,000
Answer: Option A
1203. A machine costing P280,000 has a useful life of 20,000 hrs. at the end of which its salvage value is P30,000. In the first year,
it was used for 2080 hrs, in the second year, 3160 hrs. Find the second depreciation cost in pesos.
a. P23,520
b. P25,252
c. P39,500
d. P35,400
Answer: Option C
1204. An equipment costs P400,000 and has a life of 30,000 hrs at the end of which its salvage value is x pesos. In the first year, it
was used for 6240 hrs. The book value at the end of the first year was P325,120. Find the value of x.
a. P40,629
b. P30,420
c. P40,000
d. P30,000
Answer: Option C
1205. An engineering firm from purchased, 12 years ago, a heavy planner for P50,000 with no salvage value. As the life of the planner was 20 years, a straight line
depreciation reserve has been provided on that basis. Now the firm wishes to replace the old planner with a new one possessing several advantages. It can sell the old
planner for P10,000. The new one will cost P100,000. How much new capital will be required to make the purchase?

a. P60,000
b. P55,000
c. P66,000
d. P57,000
Answer: Option A
1206. Ten years ago, a contractor was able to purchase a crane whose capacity is 2000 tons costing P125 per ton. The life was estimated to be 15 years with a salvage
value of 10% of the cost. A market has been found for the old crane for P80,000. If the depreciation has been figured on a straight line basis what is the difference
between the depreciation book value of the old crane and its sale value.

a. P10,000
b. P30,000
c. P15,000
d. P20,000
Answer: Option D
1207. What is the nominal value of interest compounded continuously for a period of 5 years of an equal payment series if the
capital recovery factor is equal to 0.2385787.
a. 4%
b. 5%
c. 6%
d. 8%
Answer: Option C
1208. What is the nominal rate of interest compounded continuously for a period of 5 years of an equal payment series if the sinking
fund factor is equal 0.180519?
a. 4%
b. 5%
c. 6%
d. 8%
Answer: Option B
1209. Compute the number of years so that the capital recovery factor of a uniform payment series be equal to 0.218638 if money is
worth 3% compounded continuously.
a. 5
b. 4
c. 6
d. 3
Answer: Option A
1210. A manufacturing firm wishes to give each 80 employee 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 P2000 bonus?
a. P12,608
b. P12,615
c. P12,600
d. P12,300
Answer: Option B
1211. An instructor plans to retire in one year and want an account that will pay him P25000 a year for the next 15 years. Assuming
6% annual effective interest rate, what is the amount he would need to deposit now? (The fund will be depleted after 15 years)
a. P249,000
b. P242,806
c. P248,500
d. P250,400
Answer: Option B
1212. Ryan invest P5,000 at the end of each year in an account which gives a nominal annual interest of 7.5%, compounded
continuously. Determine the total worth of his investment at the end of 15 years.
a. P133,545.58
b. P142,647.28
c. P126,336.42
d. P135,429.64
Answer: Option A
1213. A car dealer advertise the sale of a car model far a cash price of P280,000. If purchased in installment, the required down payment is 15% and balance payable in 18
equal monthly installments at an interest rate of 1.5% per month. How much will be the required monthly payments?

a. P15,185.78
b. P11,588.72
c. P10,972.33
d. P15,558.12
Answer: Option A
1214. How much must be deposited at 6% each year beginning Jan 1, year 1, in order to accumulate P5,000 on the date of the last
deposit, Jan 1, year 6?
a. P751
b. P717
c. P715
d. P775
Answer: Option B
1215. 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 when it will be constructed 10 years after. To provide for the required capital expense, it plans to put up a sinking fund for the
purpose. How much must the company deposit each year if the interest to be earned is computed at 15%

a. P197,008.25
b. P199,090.25
c. P177,009.25
d. P179,008.25
Answer: Option A
1216. Rainer Wandrew borrowed P50,000 from Social Security System, in the form of calamity loan, with interest at 8% quarterly
installments for 10 years. Find the quarterly payments.
a. P1827.79
b. P1892.18
c. P1287.78
d. P1972.36
Answer: Option A
1217. For having been loyal, trustworthy, and efficient, the company has offered a superior yearly gratuity pay of P20,000 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, having less interest that the company would
have earned if the gratuity is to be paid in yearly basis. If interest is 15%, what is the equivalent lump sum that he could get?

a. P100,375.37
b. P100,735.37
c. P101,757.37
d. P100,575.37
Answer: Option A
1218. If P500 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. P3,210
b. P3,577
c. P3,000
d. P4,260
Answer: Option B
1219. A series of year and payments extending over eight years are as follows: P10,000 for the first year, P20,000 for the second year, P50,000 for the third year, and
P40,000 for each year from fourth year through the 8th year. Find the equivalent annual worth of these payments if the annual interest is 8%.

a. P44,800.00
b. P30,563.00
c. P35,650.00
d. P33,563.85
Answer: Option D
1220. 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 payments will be made after three years. What payments are necessary if money is worth 15% per annum?

a. P2870
b. P3919
c. P5100
d. P2670
Answer: Option B
1221. San Miguel Corporation purchases P400,00 worth of equipment in year 1970. It decided to use straight line depreciation over the expected 20 year life of the
equipment. The interest rate is 16%. If the overall tax rate is 35% , what is the present worth of the tax shield?

a. P40,298.68
b. P41,501.89
c. P45,450.28
d. P51,410.37
Answer: Option B
1222. A local firm is establishing a sinking fund for the purpose of accumulating a sufficient capital to retire its outstanding bonds and maturity. The bonds are
redeemable in 10 years, and their maturity value is P150,000. How much should be deposited each year if the fund pays interest at the rate of 3%?

a. P12,547.14
b. P13,084.58
c. P14,094.85
d. P16,848.87
Answer: Option B
1223. A machine costs P20,000 today and has an estimated scrap value of P2,000 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?

a. P2,808.88
b. P3,290.00
c. P3,920.00
d. P3,610.00
Answer: Option A
1224. A machine is under consideration for investment. The cost of the machine is P25,000. Each year it operates, the machine generates P15,000. Given an effective
annual interest rate of 18%, what is the discounted payback period, in years, on the investment of the machine?

a. 1.75 years
b. 3.17 years
c. 1.67 years
d. 2.16 years
Answer: Option D
1225. Company A purchases P200,000 of equipment in year zero. It decides to use straight line depreciation over the expected 20 year life of the equipment. The interest
rate is 14%. If the average tax rate is 40%, what is the present worth of the depreciation tax held?

a. P30,500
b. P26,500
c. P39,700
d. P40,000
Answer: Option B
1226. Instead of paying P100,000 in annual rest 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
P100,000 loan for a new building at 6% interest. The firm will invest P100,000 of the rent saved and earned 18% annual interest on that amount. What will be the
difference between the revenue and expenses?
a. Firm will need P17,900 extra
b. Firm will break even
c. Firm will have P21,500 left over
d. Firm will need P13,000 extra
Answer: Option A
1227. A man inherited a regular endowment of P100,000 every end of 3 months for x years. However, he may choose to get a single
lump of P3,702,939,80 at the end of 4 years. If the rate interest was 14% compounded quarterly, what is the value of x?
a. 13 years
b. 10 years
c. 12 years
d. 11 year
Answer: Option B
1228. A service car whose car price was P540,000 was bought with a down payment of P162,000 and monthly installments of
P10,847.29 for 5 years. What was the rate of interest if compounded monthly?
a. 30%
b. 24%
c. 20%
d. 15%
Answer: Option B
1229. What is the present worth of a 3 year annuity paying P3000 at the end of each year, with interest at 8% compounded
annually?
a. P7,731.29
b. P9,731.79
c. P7,371.29
d. P9,371.79
Answer: Option A
1230. 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 on pesos?
a. P44,528.34
b. P42,821.87
c. P43,625.92
d. P45,825.62
Answer: Option B
1231. 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 if the cost of money is 14% compounded quarterly?
a. P3,702,939.73
b. P3,802,862.23
c. P3,502,546.23
d. P3,602,431.73
Answer: Option A
1232. A man paid 10% down payment of P200,000 for a house and lot and agreed to pay the balance on monthly 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. 5 years
b 9 years
c. 8years
d. 7 years
Answer: Option A
1233. A father wishes to provide P4000 for his son on his 21st birthday. How much should he deposit every 6 months in a savings
bank which pays 3% compounded semi-annually if the first deposit is made when the son is 3.5 years old?
a. P45.76
b. P94.24
c. P84.61
d. P78.68
Answer: Option C
1234. An employee obtained a loan of P100,000 at the rate of 6% compounded in order to build a house. How much must he pay
monthly to amortize the loan within a period of 10 years?
a. P8,322.07
b. P1,101.80
c. P2,494.04
d. P3,452.90
Answer: Option B
1235. If money is worth 5% compounded semi-annually, find the present value of a sequence of 12 semi-annual payments of P500
each, the first of which is due at the end of 4.5 years.
a. P4,209.51
b. P5,602.62
c. P6,240.62
d. P7,161.42
Answer: Option A
1236. An annual deposit of P1270 is placed on the fund at the end of each year for 6 years. If the fund invested has a rate of interest
of 5% compounded annually, how much is the worth of this fund at the end of 9 years?
a. P12,000
b. P10,000
c. P11,000
d. P14,000
Answer: Option B
1237. A fund for replacement of a machinery in a plant must have P30,000 at the end of 9 years. An equal deposit of P2,965 was made on the fund at the end of each 6
months for 4 years only. How much is the rate of the fund invested if it is compounded semi-annually?

a. 3.5%
b. 4.5%
c. 5.5%
d. P6.5%
Answer: Option A
1238. In purchasing a house, a man makes a cash payment and takes out a mortgage for P10,000 on which he agrees to pay P200
at the end of each month for 5 years. At what interest rate compounded monthly was interest charged on the mortgage?
a. 8.41%
b. 7.42%
c. 7.68%
d. 9.60%
Answer: Option B
1239. How much money must you invest in order to withdraw P2000 annually for 10 years if the interest rate is 9%?
a. P12,853.32
b. P12,881.37
c. P12,835.32
d. P12,385.32
Answer: Option C
1240. If interest is at rate of 8% compounded semi-annually, what sum must be invested at the end of each 6 months to accumulate
a fund of P10,000 at the end of 8 years?
a. P458.20
b. P532.11
c. P498.23
d. P753.10
Answer: Option A
1241. A Corporation will invest P5000 in a fund at the end of each 6 months to accumulate P100,000 to initiate a plant overhaul. If
the fund is invested at 6.5% compounded semi-annually, how may years will the fund contain at least P100,000?
a. 8 years
b. 6 years
c. 10 years
d. 9 years
Answer: Option A
1242. A piece of machinery can be bought for P10,000 cash, or for P2000 down and payments of P750 per year for 15 years. What
is the annual interest rate for time payments?
a. 4.61%
b. 3.81%
c. 5.71%
d. 11.00%
Answer: Option A
1243. To accumulate a fund of P8000 at end of 10 years, a man will make equal annual deposit of P606.94 in the fund at the end of
each year. How much is the rate of interest if it is compounded annually?
a. 6%
b. 8%
c. 10%
d. 12%
Answer: Option A
1244. A purchasing engineer of a certain firm is to purchase a second hand truck for P75,000. A dealer offers cash payment of P5,000 and P6486 per month for 12
months. Another dealer offered under the same condition with 0.75% interest per month for 12 months of the unpaid balance. Which offer should the engineer choose and
what is the rate of interest?
a. 0.62%
b. 1.66%
c. 0.75%
d. 0.40%
Answer: Option C
1245. If a low cost house and lot worth P87,000 were offered at 10% down payment and P500 per month for 25 years. What is the
effective monthly interest rate on the diminished balance?
a. 0.492%
b. 0.687%
c. 0.531%
d. 0.683%
Answer: Option A
1246. A house and lot can be acquired with a down payment of P500,000 and a yearly payment 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 the money is worth 14% compounded
semi-annually, what is the cash price of the property?
a. P810,000
b. P808,836
c. P801,900
d. P805,902
Answer: Option B
1247. A man bought a brand new car for P650,000 on installment basis at the rate of 10% per annum on the unpaid balance. If he paid a down payment of P120,000 cash
and proposed to pay the balance in equal monthly payment for 2 years, what should be his monthly payment?

a. P54,323.03
b. P34,532.94
c. P24,447.03
d. P83,534.32
Answer: Option C
1248. A businessman is faced with the prospect of fluctuating future budget for the maintenance of the generator. During the first 5 years, P1,000 per year will be
budgeted. During the second 5 years, the annual budget will be P1500 per year. In addition, P3500 will be budgeted for an overhaul of the machine at the end of the fourth
year and another P3500 for an overhaul at the end of 8th year. Assuming compounded interest at 6% per annum, what is the equivalent annual cost of maintenance?

a. P1,888.87
b. P1,738.34
c. P1,777.38
d. P1,999.34
Answer: Option A
1249. A parent on the day the child is born wishes to have to determine what lump sum would have to be paid into an account
bearing interest at 5% compounded annually, in order to withdraw P20,000 each on the child’s 18th, 19th, 20th, and 21st birthdays.
a. P35,941.73
b. P33,941.73
c. P30,941.73
d. P25,941.73
Answer: Option C
1250. If money is worth 5% compounded semi-annually, find the present value of a sequence of 12 semi-annual payments of P500
each, the first of which is due at the end of 4.5 years.
a. P4,209.51
b. P5,038.29
c. P3,958.48
d. P4,936.39
Answer: Option A
1251. A businessman borrowed P300,000 with interest at the rate of 6% compounded semi-annually. He agrees to discharge his obligation by paying a series of 8 equal
semi-annual payments, the first being due at the end of 5.5 years. Find the semi-annual payment.

a. P69,475.53
b. P57,434.78
c. P73.083.59
d. P40,922.40
Answer: Option B
1252. A man borrowed P300,000 from a lending institution which will be paid after 10 years at an interest rate of 12% compounded
annually. How much should he deposit to a bank monthly in order to discharge his debt 10 years hence?
a. P2,798.52
b. P3,952.50
c. P4,672.31
d. P5,093.06
Answer: Option D
1253. What is the accumulated amount of the five year annuity paying P6000 at the end of each year, with interest at 15%
compounded annually?
a. P40,454.29
b. P41,114.29
c. P41,454.29
d. P40,544.29
Answer: Option A
1254. A man owes P12,000 today and agrees to discharge the debt by equal payments at the beginning of each 3 months for 8
years, where this payments include all interest at 8% payable quarterly. Find the quarterly payment.
a. P501.30
b. P602.40
c. P498.20
d. P701.60
Answer: Option A
1255. A man will deposit P200 with a savings and loan association at the beginning of 3 months for 9 years. If the association pays
interest at the rate of 5.5% quarterly, find the sum to his credit just after the last deposit.
a. P9236
b. P9363
c. P9563
d. P9684
Answer: Option B
1256. At what interest rate payable quarterly will payments of P500 at the beginning of each 3 months for 7 years discharge a debt
of P12500 due immediately?
a. 3.44%
b. 4.33%
c. 5.44%
d. 6.33%
Answer: Option A
1257. A P1,000,000 issue of 3% 15 years bonds was sold at 95%. If miscellaneous initial expenses of the financing were P20,000
and yearly expenses of P2,000 is incurred, what is the true cost the company is paying for the money it borrowed?
a. 2.6%
b. 4.2%
c. 4.0%
d. 3.8%
Answer: Option D
1258. A man was offered a Land Bank certificate with a face value of P100,000 which is baring interest of 8% per year payable
semi-annually and due in 6 years. If he wants to earn 6% semi-annually, how much must he pay the certificate?
a. P96,041.92
b. P90,061.49
c. P90,614.92
d. P99,814.92
Answer: Option C
1259. The National Irrigation Administration undertakes the construction of an irrigation project in the province of oriental Mindoro which will cover an area of 10,000
hectares and estimated cost P10,000,000 which was borrowed from the World Bank at the start of the construction. The construction will last 30 years with no salvage
value. Bonds will be paid at 4% per annum compounded annually for 30 years. The construction of project will take 4 years. Insurance operation and maintenance of the
system will cost P120,00 per year. Interest on sinking fund is 6%. How much should each hectare be charged?

a. P64.65
b. P66.56
c. P60.66
d. P45.65
Answer: Option A
1260. A company issued 50 bonds of P1,000 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 12th year?

a. P35,983
b. P38,378
c. P41,453
d. P37,519
Answer: Option D
1261. An oil well which could produce a net income of P15,000,000 per year for 25 years is being considered to be purchased by a group of businessman. If the return on
investment is targeted to be 20% out of the net income and the sinking fund at 18% interest is to be established at recover of investment, how much must be paid to the oil
well?
a. P70,215,276.17
b. P73,297,198.28
c. P73,921,184.58
d. P75,973,209.26
Answer: Option C
1262. An investor pays P1,100,000 for a mine which will yield a net income of P200,000 at the end of each year for 10 years and then will become useless. He
accumulated a replacement fund to recover his capital by annual investments at 4.5%. At what rate(%) does he receive interest on his investment at the end of each year?

a. 10.04%
b. 8.5%
c. 11.5%
d. 14.5%
Answer: Option A
1263. A certain marble mine property has an estimated life of 30 years at a projected annual output of 3000 cubic meters of marble blocks. Estimated management cost
per year is placed at P1,500,000 and operating cost of the quarry and processing plant is P8000 per cubic meter. The finished products, tiles and slabs, can be sold for
P12,000 per cubic meter if exported. Determine the present valuation of the mineral property if the sinking fund rate of interest is 15% and the annual dividend rate is to
be 12%.

a. P85,444,313.27
b. P85,554,371.18
c. P85,854,317.13
d. P85,345,365.28
Answer: Option C
1264. The annual dividend from a mine will be P75,000 until the ore is exhausted at the end of 30 days, and the mine becomes useless. Find the price of the mine to yield
the investor 6.5%, if he accumulated a replacement fund to restore his capital by annual investment at 5%.

a. P936,897.63
b. P836,286.39
c. P982,286.29
d. P735,385.53
Answer: Option A
1265. The privileges of a patent will last for 20 more years and the royalty from it will be P60,000 at the end of each year during that time. Find the value of his patent
rights to an investor who desires interest at 8% on his investment and will accumulate a capital replacement fund at 5%.

a. P594,297.20
b. P544,254.30
c. P405,384.28
d. P629,289.40
Answer: Option B
1266. The annual income from the mine is P100,000 and the life of the mine is 20 years. Find the price that an investor is willing to pay for the mine if he considers that
money is worth 5% and if he is to accumulate a sinking fund at 6% in order to replace the capital he invested.

a. P1,295,595.57
b. P1,995,959.97
c. P1,529,847.29
d. P1,159,287.92
Answer: Option A
1267. An untreated electric wooden pole that will last 10 years under a certain soil conditions costs P1200. If a treated pole will last for 20 years, what is the maximum
justifiable amount that can be paid for the treated pole, if the maximum return on investment is 12%? Consider annual taxes and insurance amount to be 1% at first cost.

a. P1,559.50
b. P1995.28
c. P1,593.20
d. P1,959.30
Answer: Option A
1268. A company must relocate one of its factories in three years. Equipment for the loading dock is being considered for purchase. The original cost is P20,000,000, the
salvage value of the equipment after three years is P8,000. The company’s rate of return on money is 10%. Determine the capital recovery rate per year.

a. P5115
b. P4946
c. P5625
d. P4805
Answer: Option C
1269. A new engine will cost P12,000 with an estimated life of 15 years and a salvage value of P800 and guaranteed to have an operating cost of P3500 per year. The new
engine is considered as a replacement of the old one. The old engine had a total annual cost of P5,200 to operate. Determine the rate of return of the new investment using
6% sinking fund to recover depreciation, if the old engine could be sold now for P2000.
a. 12.19%
b. 14.29%
c. 10.47%
d. 15.92%
Answer: Option A
1270. A corporation uses a type of motor truck which costs P5000with a life of 2 years and final salvage value of P800. How much could the corporation afford to pay for
another type of truck of the same purpose for a life of 3 years with a final salvage value of P1000? Money is worth 4%

a. P8450.66
b. P7164.37
c. P6398.24
d. P9034.56
Answer: Option B
1271. A granite quarry purchased of P1,600,000 is expected to be exhausted at the end of 4 years. If the resale value of the land is
P100,000, what annual income is required to yield an investment rate of 12%? Use a sinking fund rate of 3%
a. P551,544
b. P552,550
c. P550,540
d. P553,420
Answer: Option C
1272. A machine has a first cost of P800,000 and a salvage value of P50,000 at the end of its life after 10 years. The annual saving for the use of the machine amount s to
P124,900.97. If the annual maintenance of the machine is P4000 and the sinking fund to recover depreciation earns 6%, compute for the rate of return of investment.

a. 8%
b. 7%
c. 6%
d. 9%
Answer: Option A
1273. The first cost of a certain equipment is P324,000 and a salvage value of P50,000 at the end of its life of 4 years. If money is
worth 6% compounded annually, find the capitalized cost.
a. P1,367,901.15
b. P1,427,846.17
c. P936,431.16
d. P843,916.27
Answer: Option A
1274. A multi million project can purchase heavy duty trucks for P600,000 each. It is estimated to have a salvage value of P60000 at the end of its life which is 10 years.
Maintenance and operating cost including the driver is estimated to cost an average of P3000 per year. The contractor however can hire a similar truck and its operator
for P420 per day. If money is worth 12%, how many days per year must the service of the truck be required to justify the buying of the trucks. Use annual cost method.

a. 243 days
b. 225 days
c. 252 days
d. 255 days
Answer: Option C
1275. Each removal from a ditch in city streets is accomplished by a machine loading into trucks. This machine will cost P20,000 with labor, fuel, oil, and maintenance
amounting to P5000 per year. Life of the machine is estimated to be 5 years and no salvage value. The contractor however can hire a similar machine and its operator at
P340 per day. How many days per year must the services of the machine be required to justify the purchase of their new machine of the money is worth 10%. Use annual
cost method.

a. 428 days
b. 248 days
c. 284 days
d. 482 days
Answer: Option B
1276. A contractor can purchase a heavy-duty truck for P500,000. Its estimated life is 8 years and estimated salvage value of P6000. Maintenance is estimated to be
P2500 annually including the cost of driver and fuel maintenance. The contractor can hire a similar unit and driver for P750 a day. If interest is taken at 8%, how many
days per year must be services of a dump truck be required to justify the purchase of a truck? Use annual cost method.

a. 112 days
b. 121days
c. 132 days
d. 211 days
Answer: Option A
1277. It cost P50,000 at the end of each year to maintain a section of Kennon road. If money is worth 10%, how much would it pay
to spend immediately to reduce the annual cost to P10,000?
a. P410,000
b. P554,000
c. P400,000
d. P453,000
Answer: Option C
1278. If money is worth 12% compounded quarterly, what is the present value of the perpetuity of P1,000 payable monthly?
a. P453,876.80
b. P100,976.23
c. P342,993.70
d. P100,993.78
Answer: Option D
1279. Find the present value, in peso, of a perpetuity of P15,000 payable semi-annually if money is worth 8% compounded
quarterly.
a. P372,537
b. P374,977
c. P373,767
d. P371,287
Answer: Option D
1280. A businessman invested in a medium scale business which cost him P47,000. The net annual return estimated is P14,000 for
each of the next 8 years. Compute the benefit cost ratio if the annual rate of interest is 18%.
a. 1.21
b. 1.76
c. 2.23
d. 1.11
Answer: Option A
1281. A project costs P100,000. The benefit at the end of each year for a period of 5 years is equal to P40,000. Assuming money is
worth 8% with no salvage value, compute the benefit cost ratio.
a. 1.125
b. 2.124
c. 1.875
d. 1.597
Answer: Option D
1282. Compute the benefit cost ratio of the following project:
Project cost = P80,000
Gross income = P25,000 per year
Opening Cost = P6,000 per year
Salvage Value = 0
Life of Project = 10 years
Rate of Interest = 12%
a. 1.34
b. 1.78
c. 2.23
d. 1.11
Answer: Option A
1283. A local factory assembling calculators produces 100 units per month and sells them at P1,800 each. Dividends are 8% on the 8000 shares with par value of P250
each. The fixed operating cost per month is P25,000. Other costs are P1,000 per unit.
Determine the break even point. If only 200 units were produced per month, determine the profit.
a. 50 ; P112,656.67
b. 45 ; P122,676.88
c. 48 ; P121,666.67
d. 48 ; P212,666.67
Answer: Option C
1284. General Electric Company, which manufactures electric motor, has a capacity of producing 150 motors a month. The variable costs are P4,000 per month, the
average selling price of the motor is P750 per motor. Fixed costs of the company amounts to P78,000 per month which includes all taxes. Determine the number of motors
to be produced per month to break even and the sales volume in pesos at this point.

a. 105 units
b. 120 units
c. 110 units
d. 115 units
Answer: Option C
1285. A plywood manufacturer produces a piece of plywood at a labor cost of P0.50 and material at P3.00. The fixed charges on business are P50,000 a month and the
variable cost is P0.50 per piece. If one plywood sells for P6.00 each, how many pieces must be produced each month for the manufacturer to break even?

a. 27,000
b. 25,000
c. 24,000
d. 22,000
Answer: Option B
1286. The profit on a product selling for P8.20 is 10% of the selling price. What percentage increase in production cost will reduce
the profit by 60%?
a. 6.67%
b. 6.76%
c. 7.66%
d. 7.66%
Answer: Option A
1287. A local company assembling stereo radio cassette produces 300 units per month at a cost of P800 per unit. Each stereo radio cassette sells for P1,200. If the firm
makes a profit of 10% on its 10,000 shares with a par value of P200 per share, and the total fixed cost is P20,000 per month. What is the break even point and how much
is the loss or profit if only 100 units are produced in a given month?

a. 90 ; P3,444.33
b. 91 ; P4,333.44
c. 92 ; P3,333.33
d. 93 ; P4,444.33
Answer: Option C
1288. A certain operation is now performed by hand, the labor cost per unit is P0.54 and the annual fixed charge for tool used is estimated at P100 per year. A machine
that is being considered for this job will cost P2,400, have a salvage value of P100 at any time and a fixed annual cost of P200. With it, labor cost is P0.22 per unit. For
what number of units of product per year at zero interest and life of 6 years for the machine will the annual cost of the two methods break even?

a. 1510 units
b. 1050 units
c. 1150 units
d. 1551 units
Answer: Option A
1289. A shoe manufacturer produces a pair of shoes at a labor cost of P9.00 a pair and a material cost of P8.00 a pair. The fixed charges on the business is P90,000 a
month and the variable cost is P4.00 a pair. If the shoes sells at P30 a pair, how many pairs must be produced each month for the manufacturer to break even?

a. 10,000
b. 12,000
c. 11,000
d. 13,000
Answer: Option A
1290. An item which can be sold for P36.00 per unit wholesale is being produced with the following cost data; labor cost, P10 per unit; material cost, P15.00 per unit;
fixed charges, P10,000; variable cost, P8.00 per unit. What is the break even point sales volume and the break even sales volume if one out of every ten units produced is
defective and is rejected with only full recovery on materials?

a. 322.33 ; 377
b. 345.33 ; 379
c. 353.33 ; 333
d. 333.33 ; 397
Answer: Option D
1291. A certain firm has the capacity to produce 650,000 units of product per year. At present, it is operating at 62% capacity. The firm’s annual income is P4,160,000.
Annual fixed cost is P1,920,000 and the variable cost is equal to P3.56 per unit of product.
What is the firm’s annual profit or loss and what volume of sales does the firm break even?
a. P805,320 ; P3,354,680
b. P850,330 ; P3,543,683
c. P803,550 ; P3,276,398
d. P800,286 ; P3,186,586
Answer: Option A
1292. The direct labor cost and material cost of a certain product are P300 and P400 per unit, respectively. Fixed charges are P100,000 per month and other variable costs
are P100 per unit. If the product is sold at P1,200 per unit, how many units must be produced and sold to break even?

a. 200 units
b. 250 units
c. 300 units
d. 260 units
Answer: Option B
1293. XYZ Corporation manufacturers book cases that it sells for P65.00 each. It costs XYZ P35,000 per year to operate its plant. This sum includes rent, depreciation
charges on equipment and salary payments. If the cost to produce one bookcase is P50.00, how many cases must be sold each year for XYZ to avoid taking a loss?

a. 2334
b. 539
c. 750
d. 2233
Answer: Option A
1294. A telephone switchboard 100 pair cable can be made up with either enameled wire or tinned wire. There will be 400 soldered connections. The cost of soldering a
connection on the enameled wire will be P1.65, on the tinned wire, it will be P1.15. A 100 pair cable made up with enameled wire cost P0.55 per lineal foot and those
made up to tinned wire cost P0.76 per lineal foot. Determine the length of cable run in feet so that the cost of each installation would be the same.

a. 1121.06 ft
b. 1001.25 ft
c. 864.92 ft
d. 952.38 ft
Answer: Option D
1295. A company which manufactures electric motors has a production capacity of 200 motors a month. The variable costs are P150 per motor. The average selling price
of the motor is P275. Fixed costs of the company amounts to P20,000 per month which included taxes. The number of motors that must be sold each month to break even
is closest to:
a. 40
b. 150
c. 80
d. 160
Answer: Option D
1296. Steel drums manufacturer incurs a yearly fixed operating cost of P200,000. Each drum manufactured cost P160 to produce and sells for P200. What is the
manufacturer’s break even sales volume in drum per year? If they could manufacture 7,000 drums per year, determine the amount of profit or loss.

a. 1250 ; P70,000
b. 2500 ; P60,000
c. 5,000 ; P80,000
d. 1,000 ; P75,000
Answer: Option C
1297. A new Civil Engineer produces a certain construction ,material at a labor cost of P16.20 per piece, material cost of P38.50per piece and variable cost of P7.40 per
piece. The fixed charges on the business is P100,000 a month. If he sells the finished product at P95.00 each, how many pieces must be manufactured each month to break
even?
a. 3040
b. 3400
c. 3004
d. 4300
Answer: Option A
1298. A manufacturer produces certain items at a labor cost per unit of P315, material cost per unit of P100, variable cost of P3.00
each. If the item has a selling price of P995, how many units must be sold to break even if the monthly overhead is P461,600?
a. 600
b. 700
c. 800
d. 900
Answer: Option C
1299. A cement firm with production capacity of 130 tons per day (24 hrs) of clinker has its burning zone about 45 tons of magnesium chrome bricks being replaced
periodically, depending on some operational factors and the life of the bricks. If locally produced bricks cost costing P30,000 per ton and have a life of 6 months,
determine the more economical bricks and by how much?
a. P6,057,000
b. P6,750,000
c. P6,505,000
d. P6,075,000
Answer: Option D
1300. An equipment installation job in the completion stage can be completed in 40 days of 8 hour day work, with 40 men working. With the contract expiring in 30 days,
the mechanical engineer contractor decided to add 10 men on the job, overtime not being permitted. If the liquidated damages is P2,000 per day of delay, and the men are
paid P80 per day, how much money would he save if he will add workers?

a. P15,000
b. P15,500
c. P16,500
d. P16,000
Answer: Option D
1301. A fixed capital investment of P10,000,000 is required for a proposed manufacturing plant and an estimated working capital of P2,000,000. Annual depreciation is
estimated to be 10% of the fixed capital investment. Determine the rate of return on the total investment and the minimum pay out period if the annual profit is
P2,500,000.
a. 20.38% ; 2.68
b. 20.83% ; 2.86
c. 23.80% ; 6.28
d. 23.08% ; 6.66
Answer: Option B
1302. A 500kw electric lighting plant cost P95 per kw installed. Fixed charges is 14%, operating cost is P0.013 per kw-hr. The plant averages 150kw for 5000 hour of the
year, 420 kw for 1000 hour and 20kw for the remainder. What is the unit cost of production of electric energy?

a. P0.0184
b. P0.1084
c. P0.1840
d. P0.8104
Answer: Option A
1303. A mechanical engineer who was awarded a P450,000 contract to install the machineries of an oil mill failed to finish the work on time. As provided for in the
contract, he has to pay a daily penalty equivalent to one fourth of one percent per day for the next ten days and one percent per day for every day thereafter. If the total
penalty was P60750, how many days was the completion of the contract delayed?

a. 30 days
b. 22 days
c. 26 days
d. 24 days
Answer: Option C
1304. By selling balut at P5 per dozen, a vendor gains 20%. The cost of the eggs rises by 12.5%. If he sells at the same price as
before, find his new gain %.
a. 5.5%
b. 6.6%
c. 7.7%
d. 7.6%
Answer: Option B
1305. In a certain department store, the monthly salary of a saleslady is partly constant and partly varies as the value of her sales for the month. When the value of her
sales for the month is P10,000, her salary for that month is P900, when her monthly sales goes up to P12,000, her monthly salary goes up to P1,000. What must be the
value of her sales for the month so that her salary for that month would be P2,000?

a. P32,000
b. P35,000
c. P30,000
d. P40,000
Answer: Option A
1306. An equipment installation job in the completion stage can be completed in 50 days of 8 hour day work, with 50 men working. With the contract expiring in 40 days,
the mechanical engineer contractor decided to add 15 men on the job, overtime not being permitted. If the liquidated damages is P5,00 per day of delay, and the men are
paid P150 per day, how much money would he save with the additional workers?

a. P44570
b. P44750
c. P47540
d. P45407
Answer: Option B
1307. Jojo bought a second hand Betamax VCR and then sold it to Rudy at a profit of 40%; Rudy then sold the VCR to Noel at a
profit of 20%. If Noel paid P2,856 more than it cost Jojo, how much did Jojo pay for the unit?
a. P2200
b. P4400
c. P2400
d. P4200
Answer: Option D
1308. Dalisay Corporation’s gross margin is 45% of sales. Operating expenses such as sales and administration are 15% of sales.
Dalisay is in 40% tax bracket. What percent of sales is their profit after taxes?
a. 18%
b. 5%
c. 24%
d. 0%
Answer: Option A
1309. A manufacturer of sports equipment produces tennis rackets for which there is a demand of 200 per month. The production setup cost for each lot of racket is O300.
IN addition, the inventory carrying cost for each racket is P24 per year. Using the Economic Order Quantity (EQQ) model, which is the best production batch size fro the
rackets?
a. 71 units
b. 173 units
c. 245 units
d. 346 units
Answer: Option C
1310. A manufacturing firm maintains one product assembly line to produce signal generators. Weekly demand for the generators is 35 units. The line operates for 7
hours per day, 5 days per week. What is the maximum production time per unit in hours required of the line to meet the demand?

a. 1 hour
b. 0.75 hours
c. 3 hours
d. 2.25 hours
Answer: Option A
1311. 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 of 42%, what minimum rate or return, before payment of taxes, must the investment offer to be justified?
a. 12.1%
b. 10.7%
c. 11.1%
d. 12.7%
Answer: Option A
1312. A 200 hp generator is being considered for purchase. The generator will cost P320,000 with a life expectancy of 10 years, with an efficiency of 82%. The
maintenance cost per year is P5,000. This generator is used for 300 hours per year and the cost of fuel, oil is P0.12 per kilowatt-hour. (1 hp = 0.746 kw). Assuming the
generator will have no salvage value, what will be the monthly cost of maintaining the generator?

a. P842.40
b. P962.52
c. P786.40
d. P695.40
Answer: Option B
1313. An engineer buys a machine costing P500,000. Compute the capitalized cost if the machine has a life of 5 years and a
salvage value of P80,000. Rate of interest is 12% per annum.
a. P2,424,732
b. P1,050,934
c. P2,431,643
d. P5,124,153
Answer: Option B
1314. A project costing P250,000 yields a yearly benefit of P80,000 for a period of 10 years with no salvage value at an interest rate
of 6%. What is the benefit cost ratio?
a. 4.24
b. 3.85
c. 2.36
d. 4.30
Answer: Option C
1315. A company constructed its factory with a fixed capital investment of P120M. The net income after the tax and depreciation is
expected to be P23m per year. Annual depreciation cost is 10 % of fixed capital investment. Determine the payout period in years.
a. 3.04 years
b. 2.54 years
c. 3.43 years
d. 4.85 years
Answer: Option C
1316. A machinery costing P720,000 is estimated to have a book value of P40,545.73 when retired at the end of 10 years.
Depreciation cost is computed using a constant percentage of the declining book value. What is the annual rate of depreciation?
a. 20%
b. 25%
c. 30%
d. 35%
Answer: Option B
1317. An asset is purchased for P9,000. Its estimated economic life is 10 years after which it will be sold for P1,000. Find the
depreciation in the first three years using straight line method.
a. P2,400.00
b. P2,412.34
c. P2,250.00
d. P2,450.00
Answer: Option A
1318. An engineer bought an equipment for P500,000. He spent an additional amount of P30,000 for installation and other expenses. The estimated useful life of the
equipment is 10 years. The salvage value is x% of the first cost. Using the straight line method of depreciation, the book value at the end of 5 years will be P291,500.
What is the value of x?
a. 20%
b. 40%
c. 30%
d. 10%
Answer: Option D
1319. The initial cost of a paint sand mill, including its installation is P800,000. The BIR approved life of this machine is 10 years for depreciation. The estimated salvage
value of the mill is P50,000 and the cost of dismantling is estimated to be P15,000. Using straight line depreciation, what is the annual depreciation charge?

a. P75,500
b. P76,000
c. P76,500
d. P77,000
Answer: Option C
1320. The initial cost of a paint sand mill, including its installation is P800,000. The BIR approved life of this machine is 10 years for depreciation. The estimated salvage
value of the mill is P50,000 and the cost of dismantling is estimated to be P15,000. Using straight line depreciation, what is book value of the machine at the end of 6
years?
a. P341,000
b. P343,000
c. P340,000
d. P342,000
Answer: Option A
1321. A unit of welding machine cost P45,000 with an estimated life of 5 years. Its salvage value is P2,500. Find its depreciation rate
by straight line method.
a. 18.89%
b. 19.21%
c. 19.58%
d. 19.89%
Answer: Option A
1322. A tax and duty free importation of a 30hp sand mill for painting manufacturing cost P360,000. Bank charges and brokerage cost P5,000. Foundation and installation
costs were P25,000. Other incidental expenses amount to P20,000. Salvage value of the mills estimated to be P60,000 after 20 years. Find the appraisal value of the mill
using straight line depreciation at the end of 10 years.

a. P234,000
b. P235,000
c. P234,500
d. P235,500
Answer: Option B
1323. An equipment costs P10,000 with a salvage value of P500 at the end of 10 years. Calculate the annual depreciation cost by
sinking fund method at 4% interest.
a. P721.54
b. P724.56
c. P791.26
d. P721.76
Answer: Option C
1324. An equipment costs P50,000 with a salvage value of P250 at the end of 10 years. Calculate the annual depreciation cost by
sinking fund method at 8% interest.
a. P3123.53
b. P3223.75
c. P3434.22
d. P3241.24
Answer: Option C
1325. An asset is purchased for P12,000. Its estimated economic life is 20 years after which it will be sold for P5,000. Find the
depreciation in the first five years using straight line method.
a. P1,450
b. P1,412
c. P1,250
d. P1,750
Answer: Option D
1326. What is the difference of the amount 5 years from now for a 12% simple interest and 12% compound interest per
year?(P8,000 accumulated)
a. P1298.73
b. P1281.24
c. P1224.97
d. P1862.76
Answer: Option A
1327. Find the discount if P5,500 is discounted for 9 months at 15% compounded quarterly.
a. P2442.09
b. P1248.24
c. P1883.66
d. P2451.99
Answer: Option C
1328. Find the ordinary simple interest at 7.5% on P5000 and the corresponding amount at the end of 59 days.
a. P2145.24
b. P2241.12
c. P5061.45
d. P5123.24
Answer: Option C
1329. Find the exact simple interest at 7.5% on P5000 and the corresponding amount at the end of 59 days.
a. P5187.24
b. P5221.12
c. P5021.45
d. P5060.60
Answer: Option D
1330.) If P1050 accumulate P1275 when invested at a simple interest for 3 years. What is the rate of interest?
a. 4.21%
b. 5.85%
c. 6.73%
d. 7.14%
Answer: Option D
1331. Determine the exact simple interest on P5,000 investment for the period from January 15, 1996 to October 12, 1996 of the
rate of interest in 18%.
a. P666.39
b. P621.22
c. P632.40
d. P636.29
Answer: Option A
1332. The exact simple interest of P5000, invested from June 21, 1995 to December 25, 1995, is P100. What is the rate of interest?
a. 2.4%
b. 3.2%
c. 2.7%
d. 3.9%
Answer: Option D
1333. The amount of P50,000 was deposited in the bank earning at 7.5% per annum. Determine the total amount at the end of 5
years if the principle and interest were not withdrawn during the period.
a. P24,257.75
b. P71,781.47
c. P70,024.29
d. P29,240.99
Answer: Option B
1334. Determine the future amount of P100 for 10.25 years at a rate of 5% compounded monthly.
a. P166.77
b. P224.09
c. P163.12
d. P214.12
Answer: Option A
1335. Determine the future amount of P100 for 10.25 years at a rate of 5% compounded quarterly.
a. P124.02
b. P166.42
c. P182.42
d. P175.10
Answer: Option B
1336. Determine the future amount of P100 for 10.25 years at a rate of 5% compounded semi-annually.
a. P153.29
b. P165.90
c. P169.22
d. P173.24
Answer: Option B
1337. Determine the future amount of P100 for 10.25 years at a rate of 5% compounded daily.
a. P129.24
b. P166.94
c. P195.32
d. P128.87
Answer: Option B
1338. 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. P717.17
b. P252.91
c. P720.24
d. P287.09
Answer: Option A
1339. 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. P24214.23
b. P24311.53
c. P15125.24
d. P17504.13
Answer: Option D
1340. What annuity is required over 12 years to equate with a future amount of P20,000? Assume i = 6% annually.
a. P1121.24
b. P1244.22
c. P2314.12
d. P1185.54
Answer: Option D
1341. Find the annual payment to extinguish a debt of P10,000 payable for 6 years at 12% interest annually.
a. P2214.42
b. P2432.26
c. P2525.24
d. P2044.83
Answer: Option B
1342. A bond issue of P50,000 in 10 years, bonds in P1000 units paying 10% interest in annual payments, must be retired by the use of sinking fund which earns 8%
compounded annually. What is the total cost for the interest ad retirement of the entire bond issue.

a. P82,241
b. P84,150
c. P82,214
d. P84,510
Answer: Option D
1343. Determine the amount of interest you would receive per period if you purchase a 6%, P5000 bond which matures in 10 years
with interest payable quarterly.
a. P24
b. P98
c. P75
d. P52
Answer: Option C
1344. A corporation floats callable bonds amounting to P100,000 each having a par value of P500, the bond rate is 7.5% and the bonds are to be retired in 5 years, the
annual payments being as nearly equal as possible. What is the total payment for the whole period of 5 years?

a. P123,625
b. P124,241
c. P214,124
d. P923,124
Answer: Option A
1345. A book store purchased the best selling book at P200. At what price should this book be sold so that by giving a 20%
discount, the profit is 30%.
a. P200
b. P300
c. P400
d. P500
Answer: Option C
1246. The selling price of a tv set is double that of its net cost. If the tv set is sold to a customer at a profit of 25% of the net cost,
how much discount was given to the customer?
a. 35.8%
b. 37.5%
c. 34.5%
d. 44.5%
Answer: Option B
1347. A manufacturing firm maintains one product assembly line to produce signal generators. Weekly demand for the generators is 35 units. The line operates for 7
hours per day, 5 days per week. What is the maximum production time per unit in hours required of the line to meet the demand?

a. 1 hour
b. 2 hours
c. 3 hours
d. 4 hours
Answer: Option A
1348. Mahusay Corporation’s gross margin is 55% of sales. Operating expenses such as sales and administration are 5% of sales.
Mahusay is in 40% tax bracket. What percent of sales is their profit after taxes?
a. 20%
b. 30%
c. 40%
d. 50%
Answer: Option B
1349. How much money must you invest in order to withdraw P5000 annually for 20 years if the interest rate is 12%?
a. P37,347.22
b. P23,325.23
c. P38,243.29
d. P27,124.09
Answer: Option A
1350. If interest is at rate of 10% compounded semi-annually, what sum must be invested at the end of each 6 months to
accumulate a fund of P12,000 at the end of 8 years?
a. P507.24
b. P451.24
c. P247.24
d. P694.92
Answer: Option A
os Angeles Lakers is earning an average annual salary of $5,000,000 for 10 years. Chicago Bulls ball club would like to
d Michael Jordan, offered him an initial annual salary of $3,000,000 but is increasing at the rate of $400,000 annually. If
ey is worth 10%, which one is true?

Lakers’
Lakers’
er year than that of LA Lakers’
than that of LA Lakers’

el “The Chamber” sold its copyright to Warner Bros. for the rights to make it into a
en the following Warner Bros. proposals:
00.
he movie’s gross receipts for the next 5 years which is forecasted as follows:
ross Receipt

receive any royalty after the fifth year of exhibition of the movie, by how much is

e money in funds that earns 14% compounded annually but on different ways. Joan decided to save by making an end-
0 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
elyn
f P1,400 annually for 10 years. Who has more savings at the end of 10 years and
?

0, decided to retire and start enjoying life at age 40. He wishes to have upon his retirement the sum of P5,000,000. On
nd increased his deposit by 15% each year until he will be 40. If the money is deposited in a super savings account which
uch was his initial deposit?

nual maintenance costs of P10,000. If the annual maintenance cost is increased by

e estimated present worth of the maintenance costs if money is worth 15%?

enterprise without consideration of obligations to financial contributors or claims of

 is called:

f the cash flow on a project is zero of the interest earned by an investment.

ipal for a given unit of time and usually expressed as a percentage of the principal.

equations for compound interest for a 1 year period is known as:

ive right of a company to provide a specific product or service in a stated region of

own as:

as:

e?

ng concern has due to its operation.

ce value each, redeemable at par at the end of 15 years. To accumulate the funds required for redemption the firm
posits, the interest rate of the fund being 4%.
he 12th year?
r the purpose of accumulating a sufficient capital to retire its outstanding bonds at maturity. The bonds are redeemable in
How much should be deposited each year if the fund pays interest at the rate of 3%?

s sold at 95%. What is the rate of interest of this investment?

with a face value of P100,000 which is bearing interest of 6% per year payable
arn 8% semiannually, how much must he pay the certificate?

s and with a bond rate of 8% payable annually is to be redeemed at par at the end
yield at this price.

ays P200 per year. It is redeemable for P5,050 at the end of 10 years. What is the

ally and will be redeemed at 110% on June 21, 2004. It is bought on June 21, 2001

different from the buyer and seller, will determine in order to establish a price

ade at the end of each payment period starting from the first period.
equal intervals of time where the first payment is made after several periods, after

ade at the start of each period, beginning from the first period.

dinary annuity?

me.
each period.
e annuity.

rate, then present worth of a perpetuity =

e present value of an annuity of 1 is called

tion of the initial cost by a periodic changes to operation as in depreciation or the

prearranged program is called

constant use and passage of time.

ch the annual charge is a fixed percentage of the depreciated book value at the
ies.

ling price is expected to decline at a rate of 10% per annum due to obsolescence,

e of 10 years with a salvage value of P500. What is its book value after 8 years
ve radio equipment for P6 million, freight and installation charges amounted to 4% of the purchased price. If the
0 years with a salvage value of 8%, determine the depreciation cost during the 5th year using SYD.

any new equipment purchased, the annual depreciation cost should not exceed 20% of the first cost at any time with no
e necessary if the depreciation used is the SYD method.

00 and plans to keep it for 20 years. If the salvage value is zero at the end of the
ar? Use SYD method.

salvage value in 25 years is P100,000.00. What is the total depreciation in the first

a salvage value of P10,000 after 10 years. What is the book value after 5 years

mated life is 10 years after which it will be sold for P1,000.00. Find the book value

ost of installation is P30,000. If the salvage value is 10% of the cost of equipment
he end of the fourth year. Use straight-line method.

imated life is 10 years after which it will be sold for P12,000.00. Find the
 a salvage value of P10,000 after 10 years. Find the book value after 5 years using

and a salvage value of P10,000.00 after 10 years. What is the straight line method
t?

ave a book value of P4,350 when retired at the end of 6 years. Depreciation cost is
ining book value. What is the annual rate of depreciation in %?

stimated life is 10 years, after which it will be sold for P12,000.00. Find the
-years’ digit method.

have a book value of P40,545.73 when retired at the end of 10 years. Depreciation
he declining book value. What is the annual rate of depreciation in %?

mated economic life is 10 years after which it will be sold for P1,000.00. Find the
line method.

000. He spent an additional amount of P30,000 for installation and other expenses. The estimated useful life of the
f the first cost. Using the straight line method of depreciation, the book value at the end of 5 years will be P291,500.

g its installation, is P800,000. The BIR approved life of this machine is 10 years for depreciation. The estimated salvage
ntling is estimated to be P15,000. Using straight-line depreciation, what is the annual depreciation charge?
ng its installation, is P800,000. The BIR approved life of this machine is 10 years for depreciation. The estimated salvage
ntling is estimated to be P15,000. Using straight-line depreciation, what is the book value of the machine at the end of six

h an estimated life of 5 years. Its salvage value is P2,500. Find its depreciation rate

andmill for paint manufacturing cost P360,000.00. Bank charges arrastre and brokerage cost P5,000.00. Foundation and
al expenses amount to P20,000.00. Salvage value of the mill is estimated to be P60,000 after 20 years. Find the appraisal
t the end of 10 years.

value of P500 at the end of 10 years. Calculate the annual depreciation cost by

es in value each year by 20% of its value at the beginning of that year. Find its book

ations companies contracted for the purchase and installation of fiber optic cable linking Manila City and Cebu City at a
reight and installation charges estimated at 10% of the above total contract price. If the cable shall be depreciated over a
oney is worth 6% per annum, what is the annual depreciation charge?

mated economic life is 10 years after which it will be sold for P1,000.00. Find the
years’ digit method.

0,000. Its resale value at the end of the 5th year of the useful life is estimated at
, determine the depreciation charge for the second year.
has a total gross income for a particular year of P50,000,000. The taxable income after taking all deductions except for
epletion allowance for that particular year? Take percentage of gross income for oil as 22%.

n oil well which is estimated to contain 5,000,000 barrels of oil at an initial cost of
the year where it produces half-million barrels of oil? Use Unit or Factor method in computing depletion.

,000 and a salvage value of P50,000 at the end of its life of 4 years. If money is
zed cost.

cost is P18,000. Using interest rate of 8%, what is the capitalized cost of perpetual

sts P5,000 with 2 life years and final salvage value of P800. How much could the corporation afford to pay for another
years a with a final salvage value of P1,000. Money is worth 4%.

cted life of 10 years. The salvage value is estimated to be P2,000 and annual
appropriate rate of return on the investment if the annual revenue is P10,000?

whose cost is P250M and life is 20 years, if the bridge must be partially rebuilt at a

at a total cost of P300,000 and projected to have a useful life of 15 years. At the end of its useful life, it is estimated to
apitalized cost if interest is 18% compounded annually.
t of construction is P500,000 while annual maintenance cost is estimated at
italized cost of the house?

l last 10 years under a certain soil condition, costs P1,200.00. If a treated pole will last for 20 years, what is the
the treated pole, if the maximum return on investment is 12%. Consider annual taxes and insurance amount to be 1% of

s expected to be exhausted at the end of 4 years. If the resale value of the land is
d an investment rate of 12%? Use a sinking fund rate of 3%.

abor cost per unit of P315, material cost per unit is P100, variable cost of P3.00 each. If the item has a selling price of
h month for the manufacturer to breakeven if the monthly overhead is P461,600?

hop is P69,994. If the cost of making a forging is P56 per unit and its selling price
o be forged to break-even.

abor cost of P115 each, material cost of P76 each and variable cost of P2.32 each. If the item has a unit price of P600,
h for the manufacturer to break even if the monthly overhead is P428,000.

d operating cost of $200,000. Each drum manufactured cost $160 to produce and
n sales volume in drums per year?

hat sell for P65.00 each. It costs XYZ corporation P35,000 per year to operate its plant. This sum includes rent,
yments. If the cost to produce one bookcase is P50.00, how many cases must be sold each year for XYZ to avoid taking
tors has a production capacity of 200 motors a month. The variable costs are P150.00 per motor. The average selling
company amount to P20,000 per month which includes taxes. Find the number of motors that must be sold each month

s P70,000. If the cost of making a forging is P56 and its selling price is P125 per
to breakeven.

assembly line to produce signal generators. Weekly demand for the generators is 35 units. The line operates for 7 hours
production time per unit in hours required of the line to meet the demand?

ant must be able to sell per month to break even based on the following data:

ge regulators at a labor cost of P85.00 per unit and material cost of P350.00 per unit. The fixed charges on the business
P20.00 per unit. If the automatic voltage regulators are sold to retailers at P580.00 each, how many units must be

res electric motor has a capacity of producing 150 motors a month. The variable costs are P4,000.00 per month, the
motor. Fixed costs of the company amount to P78,000.00 per month which includes all taxes. Determine the number of

be made up with either enamelled wire or tinned wire. There will be 400 soldered connections. The cost of soldering a
on the tinned wire, it will be P1.15. A 100-pair cable made up with enamelled wire cost P0.55 per linear foot and those

he cost of each installation would be the same.

 ces 400 units per month and sells them at P1,800 each. Dividends are 8% on the 8,000 shares with par value of P250
00. Other costs are P1,000 per unit. If 200 units were produced a month, determine the profit or loss.

Air Jordan Shoes at a labor cost of P900.00 a pair and a material cost of P800.00 a pair. The fixed charges on the
costs are P400.00 a pair. Royalty to Michael Jordan is P1,000 per pair of shoes sold. If the shoes sell at P5,000 a pair,
r the manufacturer to breakeven?

e in Cebu, various size rivet holes must be made in structural members. This may be done by laying out the position of
r this method, a machinist wage rate is P20.25 per hour and he can drill 27 holes per hour. An alternative method is by
cess, the machinist wage rate is P20.00 per hour and he can complete 8 holes per minute. This method requires P0.50 per
stallation cost of P2,000.00. If all other costs are the same, for what number of rivet holes will the multiple punch

struction material at a labor cost of P16.20 per piece, material cost of P38.50 per piece and variable cost of P7.40 per
00.00 per month. If he sells the finished product at P95.00 each, how many pieces must be manufactured in each month

s certain automotive parts. Present sales volume is 500,000 units per year at a
xed expenses total P80,000.00 per year. What is the present total profit for a year?

s certain automotive parts. Present sales volume is 500,000 units per year at a selling price of fifty centavos (P0.50) per
What is the present breakeven point in units?

utomobile part with a production capacity of 700,000 units per year is only operating at 62% of capacity due to
o finance the importation of their raw materials. The annual income is P430,000.00. Annual fixed costs are P190,000.00
s the current profit or loss?
utomobile part with a production capacity of 700,000 units per year is only operating at 62% of capacity due to
o finance the importation of their raw materials. The annual income is P430,000.00. Annual fixed costs are P190,000.00
s the breakeven point?

50,000 units of product per year. At present, it is operating at 62% capacity. The firm’s annual income is P4,160,000.00.
iable costs are equal to P3.56 per unit of product. What is the firm’s annual profit or loss?

50,000 units of product per year. At present, it is operating at 62% capacity. The firm’s annual income is P4,160,000.00.
iable costs are equal to P3.56 per unit of product. What volume of sales does the firm breakeven?

for palay producers in the locality. The shop can produce each thresher at a labor cost of P1,800.00. The cost of
costs amounts to P650.00 per unit while fixed charges incurred per annum totals P69,000.00. If the portable threshers
ust be produced and sold per annum to breakeven?

ertain product are P300 and P400 per unit, respectively. Fixed charges are P100,000 per month and other variable costs
per unit, how many units must be produced and sold to breakeven?

le for Cagayan Automotive Company which manufactures and sells a single

nt year?

o set consists of P230.00 for labor and P370.00 for material. The fixed charges is operating the plant is P1,000,000.00 per
dio set can be sold for P750.00 each. Determine how many sets must be produced per month to breakeven.
 it wholesale is being produced with the following cost data:

out of every 10 units produced is defective and is rejected with only full recovery on

nt to recover is spread uniformly over the estimated life of the asset in terms of the

s cannot have a salvage value of zero?

of money is regularly deposited at compound interest in a real or imaginary fund in

depreciation of an asset at the end of the asset’s estimated life.

termines the cumulative amount of a sinking fund resulting from specific periodic

nsportation charges

culated using which formula with n = number of useful years of the equipment.

he:

the decrease in the quantity available (referring to the natural resources, coal, oil,
 .

purpose of engaging in a profitable business.

transact any business transaction which a real person could do.

business organization?

on?

rs in order that a corporation be organized?

the partnership
personal assets) only will be used to pay the liabilities.
e debt of the partnership
nal capital.

m of money is regularly deposited at compound interest in a real or imaginary fund

al depreciation of an asset at the end of the asset’s estimated life is known as;

m payments occurring at equal interval of time is;

 enterprise without consideration of obligations to financial contributors and claims

on of the initial cost by periodic changes to operation as in depreciation or the

lar prearranged program is called

terprise or project going on.

d by humans and will be purchased if money is available after the required

ed to support human life and activities, that will be purchased in somewhat the
derably.

oduce a certain product and that any action of one will lead to almost the same

y or service is supplied by a number of vendors and there is nothing to prevent

to a willing seller for a property where each has equal advantage and is under no

ty to satisfy human want.

et worth;

e original cost less depreciation, is known as;

compare two projects, which of the following could invalidated the calculations?

/company ownership?

resent worth and unequal lives have?

ciation rate?
e life

itional unit of a product is termed as:

rd of all transaction is ordinarily recorded.

osits are made at equal intervals of time for the purpose of gradually accumulating
date.
ship?

due to the passage of time;

ifies the actual rate an interest on the principal for one year as:

the factors of production is limited, either in increasing cost or by absolute quantity,

in the variable factors will result in less than proportionate increase in output.”

d the worth at some future time is:

ellers different prices for the same product where the elasticities of supply or
s known as:

n industry forming a perfect collision purposely formed to increase profit and block

down through attempts to undercut each other’s price is called;

the buyers want to buy is just equal to the quantity the sellers want to sell is called;
s capable of performing the function for which it was designed and manufactured is

viduals who own it and which can engage in practically any business transaction

f an item for which there are no goods substitute.

ntity possessing many of the legal powers of individuals. It can hold title to property,

e financial status of the company at any given time. Which of the statements is not

es freight and insurance cost;

made in order to accumulate fund F at n years in the future.

d operate an enterprise.

original cost less depreciation;

y
 s on contract documents issued to bidding date;

sing damage to another person or his property or reputation;

ds.

nterest each year

on of the actual quantity of the materials on hands as of a given date;

se price of an assets or other property over a number of years

own as:

ipal for a given unit of time and is usually expressed as percentage of the principal

nt to recover is spread over the estimated life of the asset in terms of the periods
of cash flow of project is zero, or the interest earned by an investment.

apital.

nterest;

d at the end of the investment period, it varies directly with time.

interest period and the interest earned for the period is added to the principal.

of compound interest.

riod.

intervals of time.

nd forever or the periodic payments continue indefinitely.

 od starting from the first period.

er of periods after the first.

ch period starting from the first period.

set due to usage of passage of time.

mputing depreciation

g depreciation;

sumed to vary directly to the number of years and inversely to the sum of the

o (FC –SV) at the end of the life to the property.

on value on a specified redemption date and to pay equal dividends periodically.

equal to revenue.

11% simple interest.

and agrees to pay at the end of 90 days under 8% simple interest rate. What is the

who offers P25,000.00 at the end of 60 days. Annie wished to pay immediately and the merchant offers to compute the
y is worth 14% simple interest. What is the required amount?

f interest at the end of 2 1/2 year is P4,500.00 for a simple interest of 6% per

imple interest run to amount to P41,350.00?

he annual rate of interest?

r 4 years. At the end of this time he invest the entire amount (principal plus
s. How much will he have at the end of the 16-year period.?

s P890.39 on maturity date after deducting the 20% withholding tax on interest
00.00 loan. How much will be repaid if the loan is paid back in one lump sum after

0 days. If paid in 31 days, there is 3% discount. What is the simple interest paid?

mpounded quarterly.

mpounded semi-annually.

mpounded monthly

mpounded annually.

1,346 if invested at 6% compounded quarterly.

ouble its amount if invested at an interest rate of 6% compounded bi-monthly

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

every 2 years beginning January 1, 1982. Counting from that date, at what year will
 18% interest per annum, what is the total amount to be repaid at the end of one

at 12% compounded continuously?

vefold its amount if money is worth 14% compounded semiannually.

y is how many percent if compounded quarterly?

t the end of 7 years. If money is worth 14% compounded quarterly how much is it

ther. If his father deposited an amount of P450,000 in a trust fund earning 8%

he man receive his will?

who offers 8% interest compounded quarterly. If the interest is subject to a 14%

alent to an interest rate of 14% compounded quarterly

s at the end of the third and the fourth year? The annual interest rate is 8%.
 At the end of 6 years, it renews the loan for the amount due plus P2,000 more for

e future worth of P1,000 at the end of 4 years?

er in the amount of P20,000.00. How much money in the form of interest will he get
ompounded annually at the end of 7 years?

nnum simple interest. How much will be due at the end of 75 days?

ays. The net interest after deducting 20% withholding tax is P890.36. Find the rate

00 by her employer CPM Industrial Fabricator and Construction Corporation with an interest of 6% for 180 days on the
ould accept a promissory note for P20,000 non-interest for 180 days. If discounted at once, find the proceeds of the note.

12 months, if the sum of P25,000 is invested today at simple interest rate of 1% per

h simple interest of 12%, find the present worth of P50,000 which is due at the end

who ask P1,250 at the end of 60 days. Annie wishes to pay immediately and the
assumption that money is worth 8% simple interest. What is the cash price?
hilippines that when they grant a loan. The interest for one year is automatically deducted from the principal amount upon
ore assume that you applied for a loan with a bank and the P80,000 was approved at an interest rate of 14% of which
k of P68,800. Since you have to pay the amount of P80,000 one year after, what then will be the effective interest rate?

mercial bank which has a simple interest rate of 16% but the interest is to be deducted from the loan at the time that the
he end of one year. How much is the actual rate of interest?

00.00 loan. How much will be repaid if the loan is paid back in one lump sum after

e of 12% per annum, compounded quarterly. What is the effective rate?

8% compounded semi-quarterly?

t yields 9.84% annually. Find how often the interest is compounded.

accounts four times a year. The effective annual interest rate is

-annually is

pounded quarterly. What is the effective annual interest rate?

mpounded quarterly is

f P100,000 to be made in 10years with an interest of 12% compounded quarterly.

ce. The inheritance will be paid in a lump sum of P10,000 on his 21st birthday.
the boy’s 6th birthday, if the interest is compounded annually? Assume i = 4%

bank earning at interest of 7.6% per annum. Determine the total amount at the
ot withdrawn during the period?

1 year and P75,000 due in 4 years. He agrees to pay P50,000 today and the
end of two years if money is worth 5% compounded semi-annually?

ally, how much will a deposit of P1,500 be in 15 years?

adruple if it earns 7% compounded semi-annually?

ncrease by P3,000 if interest at 12% compounded semi-annually?

k in one year by P700.00. What are the conditions on the rate of interest, i% per
ent worth of the investment is positive? Assume i is greater than or equal to 0.
id in 5 year in one lump sum at 12% compounded annually. How much profit in

the end of 6 years, it renews the loan for the amount due plus P2,000 more for 2

nt that pays 8% interest compounded annually. Approximately how much money

at an interest rate of 24% compounded semi-annually. How much would the sum

compounded monthly, determine the compounded interest after 7 years and 9

n a bank account, and today it is worth P2,370.00. The bank pays interest
this account?

8% compounded quarterly, find the compounded interest at the end of 10 years.

eight years, at which time the principal is withdrawn. The interest has accrued is
l interest rate is 5%, what will be the withdrawal amount at the end of the 16th year?

20 years ago. Today it is worth P3,000.00. Interest is paid semi-annually.

 business for a period of six years. With a given interest rate on the investment of
will he collect at the end of the sixth year?

. How much is that money worth now considering interest at 8% compounded

n interest rate of 7% compounded semi-annually. How much is the sum now?

% security for 5 years. During that time, the average annual inflation is 6%. How
ccount at maturity?

00 is left to a girl to be held in trust fund by her guardian until it amounts to P50,000.
s invested at 8% compounded quarterly?

riend at an interest rate of 1.5% per month instead of taking a loan from a bank at a
you will save or lose on the transaction.
om the bank.
friend.
m the bank
m the bank.

ents at the end of the third year and fourth year? The annual interest rate is 8%.

100,000 worth of land. The interest rate is 12% nominal and payable in 20 years.

ual payments at the end of 6 quarters. If the interest is 12% compounded quarterly.
yment is P2,000.00?
 o to college. Your father invested P5,000 in 7% account for your education when you were born. If you withdraw
h birthday, how much will be left in the account at the end of the 21st year?

r annuity paying P6,000 at the end of each year, with interest at 15% compounded

ar beginning on January 1, year 1, in order to accumulate P5,000 on the date of

unded semi-annually is to be amortized by semi-annual payment over the next 5

semi-annual payment.

interest and paid P2,000 per annum for the last 4 years. What does he have to
his loan?

of his 5 years old son, P500 at the of end each month for 10 years at 12% annual
will be available in two years is

% compounded annually in order to build a house, how much must you pay monthly

o withdraw P2,000 annually for 10 years if the interest rate is 9%?

 S » Engineering Economics
oard Exam
E

ngineering Economics Part 21 | ECE Board Exam

the Series in Engineering Economics as one of the General Engineering and Applied Sciences (GEAS) topic. In
o expose yourself and familiarize in each and every questions compiled here taken from various sources including past
plied Sciences (GEAS), Engineering Economy Books, Journals and other Engineering Economy References.

f the Series
E Board Exam
ions.
wn payment and 10 deferred semi-annual payments of P8,000 each, starting three
investment if the rate of interest is 12% compounded semi-annually?

terest at 5% compounded annually. He agrees to pay his obligations by paying 8

end of 10 years. Find the annual payments.

machine costing P12,000 if paid in cash. However, she can purchase it on installment basis to be paid within 5 years. If
s her yearly amortization if all payments are to be made at the beginning of each year?

ive annual interest. He must pay back the loan over 30 years with uniform monthly
at does Mr. Ayala pay each month?

payment 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
y is worth 14% compounded annually, what is the cash price of the property?

0,000 cash or for P2,000 down and payments of P750 per year for 15 years. What

100,000 every end of 3 months for 10 years. However, he may choose to get a
ow much is this lump sum if the cost of money is 14% compounded quarterly?
s to determine what lump sum would have to be paid into an account bearing interest at 5% compounded annually, in
th,19th,20th and 21st birthdays. How much is the lump sum amount?

year and want an account that will pay him P25,000 a year for the next 15 years. Assuming a 6% annual effective interest
now? (the fund will be depleted after 15 years).

ollowed by payments of P200,000 each year for 3 years. What is the annual rate of

000, a salvage value of P2,000 and a life of 10 years. If your cost of operation per
00, what is the approximate rate of return on the investment?

00 for a house and lot and agreed to pay the balance on monthly installments for ‘x’
thly. If the monthly installment was P42,821.87, find the value of x?

80 employees a holiday bonus. How much is need to invest monthly for a year at
so that each employee will receive a P2,000 bonus?

uity of P15,000 payable semi-annually if money is worth 8% compounded

E to provide annual scholarships to deserving EE students. The fund will grant P5,000 for each of the first five years,
year thereafter. The scholarship will start one year after the fund is established, if the fund earns 8% interest, what is the
ace value each, redeemable at par at the end of 15 years to accumulate the funds required for redemption. The firm
posits, the interest rate of the fund being 4%.
he 12th year?

th an estimated life of 5 years. Its salvage value is P2,500. Find its depreciation rate

d a salvage value of P10,000 after 10 years. Find the book value after 5 years

ng its installation, is P800,000. The BIR approved life of this machine is 10 years for depreciation. The estimated salvage
ntling is estimated to be P15,000. Using straight-line depreciation, what is the annual depreciation charge and what is the
?

cost of installation is P30,000. If the salvage value is 10% of the cost of equipment
the end of the fourth year. Use straight-line method.

salvage value in 25 years is P100,000.00. What is the total depreciation in the

d a salvage value of P10,000.00 after 10 years. What is the block value after 5

e value of P500 at the end of 10 years. Calculate the annual depreciation cost by
o have a book value of P40,545.73 when retired at the end of 10 years. Depreciation cost is computed using a constant
he annual rate of depreciation in

have a book value of P4,350 when retired at the end of 6 years. Depreciation cost
ing book value. What is the annual rate of depreciation in %?

any new equipment purchased, the annual depreciation cost should not exceed 20% of the first cost at any time with no
e necessary if the depreciation used is the SYD method.

.00 and plans to keep it for 20 years. If the salvage value is zero at the end of 20th
se SYD method.

ave radio equipment for P6 million, freight and installation charges amounted to 4% of the purchased price. If the
0 years with a salvage value of 8%, determine the depreciation cost during the 5th year using SYD.

imated life is 10 years after which it will be sold for P1,000.00. Find the book value
epreciation is used.

e this year is expected to be P500. The cost will increase P50 each year for the subsequent 9 years. The interest is 8%
resent worth of maintenance for the machine over the full 10-year period?

whose cost is P250 M and life is 20 years, if the bridge must be partially rebuilt at a
hich costs P5,000 with life of 2 years and final salvage value of P800. How much could the corporation afford to pay for
life is 3 years with a final salvage value of P1,000. Money is worth 4%.

es in three years. Equipment for the loading dock is being considered for purchase. The original cost is P20,000, the
s P8,0000. The company’s rate of return on the money is 10%. Determine the capital recovery rate per year.

shop is P69,994. If the cost of making a forging is P56 per unit and its selling price
o be forged to break-even.

labor cost of P115 each, material cost of P76 each and a variable cost of P2.32 each. If the item has a unit price of P600,
each month for the manufacturer to break even if the monthly overhead is P428,000?

xed operating cost of $200,000. Each drum manufactured cost $160 to produce and
n sales volume in drums per year?

tage regulator at a labor cost of P85.00 per unit and material cost of P350.00 per unit. The fixed charges on the business
P20.00 per unit. If the automatic voltage regulators are sold to retailers at P580.00 each, how many units must be

e plant must be able to sell per month to break even based on the following data:

is P70,000. If the cost of making a forging is P56 and its selling price is P125 per
to break even.
that sell for P65.00 each. It costs XYZ Corporation P35,000 per year to operate its plant. This sum includes rent,
yments. If the cost to produce one bookcase is P50.00, how many cases must be sold each year for XYZ to avoid taking

otors has a production capacity of 200 motors a month. The variable costs are P150.00 per motor. The average selling
company amount to P20,000 per month which includes taxes. The number of motors that must be sold each month to

thin 60 days but offers 3% discount for cash in 30 days. Find the rate of interest.

000 000 for 30 days at 7.5% per year. If the withholding tax is 20%, what is the net
h?

ys. The net interest after deducting 20% withholding tax is P890.36. Find the rate of

tinuously is given on the account. What is the accumulated amount of P10 000 after

s. How much is that worth now considering interest at 8% compounded quarterly?

ears and 6 months and bears on interest of P85 649.25. What is the rate of interest
to triple itself at 5% per annum compounded continuously?

continuously, compute the effective rate of annual interest.

d of time at a given rate of interest, compute the value of the single payment

thin 60 days but offers a 3% discount for cash in 30 days. Find the rate of interest.

hilippines that when they grant a loan, the interest for 1 year is automatically deducted from the principal amount upon
assume that you applied for a loan with the bank and the P80000 was approved at an interest rate of 14% of which
ck of P68800. Since you have to pay the amount of P80000 one year after, what then will be the effective interest rate?

bank. He received from the bank P1,340.00 and promised to pay P1,500.00 at the end of 9 months. Determine the
nt rate or often referred to as the “Banker’s Discount”.

omissory note that he signed in the amount of P25000.00 for a period of 1 year. He received only the amount of
nterest and an additional amount of P85.00 for notarial and inspection fees. What was the rate of interest that the bank

000 by her employer CPM Industrial Fabricator and Construction Corporation with an interest at 6% for 180days on the
ould accept a promissory note for P20,000 non-interest for 180days. If discounted at once, find the proceeds in the note.

annum simple interest. How much will be due at the end of 75 days?
ment of P1,000,000 for 30 days at 7.5% per year. If withholding tax is 20%, what is
he end of the month?

1,200 due at the end of 100 days but offers a 4% discount for cash in 30days. What
yer can afford to borrow money in order to take advantage of the discount?

ffered the options of paying P250 cash at the end of 30 days or P270 at the end of
interest if he agree to pay at the end of 120days?

oan of P1500 from Mr. Abella and signs a note promising to pay the principal and accumulated simple interest at the rate
Mr. Abella discounts the note at the bank whose discount rate is 6%. What does he receive?

ys. The net interest after deducting 20% withholding tax is P890.36. Find the rate of

ith simple interest of 12%, find the present worth of P50,000 which is due at the end

romise to pay the amount for 1year. He received only the amount of P1,920 after the bank collected an advance interest
e of interest that the bank collected in advance?

e end of 90days. He was offered a 10% discount if he pays in 30 days. Find the
 160 days or P190 at the end of 40 days. Determine the rate of interest.

d for 6 months at 8% simple interest.

mpounded quarterly is            .

uses a simple discount rate of 14%. He signs a promissory note promising to pay P500.00 per month at the end of 4th,
mount of money that he received from the bank.

tinuously is given on the account. What is the accumulated amount of P10,000 after

00 is left to a girl to be held in trust fund by her guardian until it amount to

of the fund is invested at 8% compounded quarterly?

s. How much is that worth now considering interest at 8% compounded quarterly?

% compounded quarterly. Compute the compound interest after 4 years and 9

h is P5000 worth in 10 years in a continuously compounded account?

ears and 6 months and bears on interest of P85649.25. What is the rate of interest

pound interest of P50,000 if the interest rate is 9% compounded quarterly?

d 9 months ago at an interest of 8% compounded quarterly. If the sum now is

d?

s P22,318.30 after 5 years.

ded quarterly?

ed quarterly?

invested at 5% compounded annually?

which is equivalent to 5% nominal annual interest compounded continuously.

to triple itself at 5% per annum compounded continuously.

fund at the end of 8 years. How much should he invest in a fund that will pay 6%
ompute the equivalent nominal annual interest compounded continuously.

unded continuously for 10 years if the compound amount factor is equal to

rest per month, compounded continuously on the unpaid balance purchases made
interest.

continuously, compute the effective annual rate if interest.

nt of P500 compounded annually at nominal rate of 5% and if it is compounded

ate of interest is charged for a continuously compounded loan?

unded continuously for 8 years if the present worth factor is equal to 0.6187835?

s from now for a 10% simple interest and 10% compound interest per year?

r 6 months at 8% compounded quarterly.

d of time at a given rate interest, compute the value of the single payment present

eriod of 5 years is 1.33822. What is the nearest value of the interest rate?

or a period of 8 years is equal to 0.58201, compute the nearest value of the rate of

ly, compute the single payment amount factor for a period of 6 years.

or 8 years, at which time the principal is withdrawn. The interest has an accrued left
t is 5%, what will be the withdrawn amount at the end of the 16th year?

or a period of 8 years.
6% .

thly.

ously.

ounded quarterly is equal to 1.612226.

pounded bi-monthly is equal to 0.787566.

nt factor compounded bi-monthly for 5 years is equal to 1.487887.

years for an effective rate of 8.33% if it is compounded continuously.

factor if it is compounded continuously.

or if it is compounded continuously.

g would it take in years for the amount of the loan and interest to equal P3280 if it

g would it take in years if it was made at 8% compounded quarterly.

g would it take in years if it was made at 8% compounded continuously.

ter 4 years compounded bi-monthly. Find the nominal rate of interest, the effective
if it is compounded quarterly.

ble itself if it is invested at 6% simple interest, compounded semi-quarterly, and

 it is invested at 10% simple interest.

nvested at 10% compounded annually.

compounded continuously.

d 6 months and bears on interest of P85,659.25.

ompounded quarterly?

compounded semi-quarterly?

mpounded semi-quarterly.

mpounded bi-monthly.

unt factor for 8% compounded bi-monthly for 5 years.

of 8% for a period of 4 years.
ed continuously?

factor if it is compounded continuously?

or if it is compounded continuously?

eriod of 5 years is 1.33822, what is the nominal rate of interest?

compounded semi-annually of problem# 1124?

compounded quarterly of problem# 1124?

arterly. If it takes money to quadruple in 17.5 years, find the value of x.

1127?

27 is compounded daily?
k that charges an interest rate of 12%.
5 years if it was made at 12% simple interest?

5 years if it was made at 12% compound semi-quarterly?

5 years if it was made at 12% compound continuously?

quarterly, tax free for 9 years and 3 months. How much interest was earned at the

ch earned 9% compounded quarterly tax free. After how many years would it be

% compounded quarterly and was free of taxes. After exactly 5 years, the total
of x?

ate of interest?

ey if it is invested at x% compounded semi-annually. Find the value of x.

he rate of x% compounded quarterly. Compute the value of x.

arterly. If it takes the money into quadruple in 17.5 years, find the value of x.
in a bank account, and today it is worth P2.370.00. The bank pays interest
this account?

friend at an interest rate of 1.5% per month instead of taking a loan from a bank at
ey you will save or lose on the transaction.

of P1000,000 to be made in 10 years with an interest of 12% compounded

certain bank earns 6% interest per annum compounded monthly. If the earnings
ould the net value of the deposit be after three quarters?

ounded semi-annually is:

bank earning an interest of 7.5% per annum. Determine the total amount at the
ot withdrawn during the period.

18% compounded daily? Take 1 year is equal to 360 days.

when invested at a certain nominal rate of interest compounded semi-annually,

effective rate.

d quarterly.
 t rate of 18% compounded semi-quarterly?

% compounded quarterly, find the compounded interest at the end of 10 years.

company for 6 years at 12%. At the end of 6 years, it renews the loan for the
What is the lump sum due?

to quadruple if it earns 7% compounded semi-annually?

n interest rate of 24% compounded semi-annually. How much would the sum be

% compounded monthly, determine the compounded interest after 7 years and 9

of 24% compounded semi-annually. After how many years will the sum be

elds 9.84% annually. How often is the interest compounded?

m to replace the cars of its sales representatives at the end of every 5 years. If the present price of the approved type of
of 5 years of 60% its present value, how much money must the company accumulate for 5 years if inflation annually is
early.
% security for 5 years. During that time, the average annual inflation is 6%. How
at maturity?

d 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
The machine will then be replaced with an exact duplicate. The company plans to establish a reserve fund to accumulate
verage annual rate of inflation of 3% is anticipated, how much capital must be accumulated?

10%, what interest rate will take care of inflation and the cost of money?

ost P1000 and will pay P50 interest each year for 20 years. The bond will mature at the end of 20 years and he will
nflation during this period, what rate of return will the investor receive after considering the effect of inflation?

years is equal to P1471.07. What is the rate of inflation if the interest rate is equal

st of money and inflation. If the nominal rate of interest is 6%, what is the rate of

,000. Other expenses including installations amounted to P30,000. At the end of its estimated useful life of 10 years, the
straight line method of depreciation, what is the book value after 5 years?

vage value of x at the end of its life of 5 years. The book value at the end of the 4th
straight line method depreciation?
at the end of its useful life of 6 years. The book value at the end of 5 years is
ciation, what is the first cost of the machine?

f P5M and is estimated to have a life of 20 years with a salvage value of P1M. A certain equipment worth P570,000 was
te economically for 15 years with a salvage value of P50,000. Determine the book value of the plant and equipment after

ife expectancy of 8 years and has a salvage value of P3,500 at the end of its life.
38,500. Using straight line method of depreciation, solve for the value of x.

000 and the cost of handling and installation is P30,000. If the book value of the equipment at the end of the 3rd year is
d to be 5 years, determine the salvage value of this equipment at the end of 5 years.

,000. He spent an additional amount of P30,000 for installation and other expenses. The salvage value is 10% of the first
e P291,500 using straight line method of depreciation, compute the useful life of the equipment in years.

cost of installation is P30,000. If the salvage value is 10% of the cost of equipment
the end of the fourth year. Use straight line method.

alvage value of P300,000 at the end of its life of 5 years. Determine the total
imated economic life is 10 years after which it will be sold for P1,000.00. Find the
line method.

enerator for P4000 will allow the company to produce its own energy. The configuration can be assembled for P500. The
0 years. The maintenance cost is P300 per year, and cost to operate is P0.85 per hour for fuel and related cost. Using
for the operation? There is a P400 salvage value for the system at the end of 10 year.

and a salvage value of P10,000.00 after 10 years. What is the straight line method
t?

and a salvage value of P10,000.00 after 10 years. What is the book value after 5
?

age of P2,000 at the end of its life of 10 years. Find the book value at the end of
ation.

timated life is 10 years after which it will be sold for P1,000.00. Find the book
gits(SYD) depreciation is used.

ave radio equipment for P6M. Freight and installation charges amounted to 3% of the purchased price. If the equipment
a salvage value of 5%, determine the depreciation charge during the 5th year using the Sum of Year Digit Method.
 ons companies contracted for the purchase and installation of a fiber optic cable linking two major Asian cities at a total
installation charges at 10% of the above total contract price. If the cable depreciated over a period of 15 years with zero
ring the 8th year using the sum of year digits method?

and has a salvage value of P350 at the end of 8 years. Determine its book value
d.

onomic life of n years and a salvage value P350 at the end of n years. If the book value at the end of 4 years is equal to
quipment using the sum of years digit method.

and plans to keep it for 20 years. If the salvage value is zero at the end of the 20th
se sum of years digit method.

8 years and salvage value of x after 8 years. If the book value of the equipment at
vage value x using the sum of years digit method.

very new equipment purchased, the annual depreciation should not exceed 20% of
etermine the length of service if the depreciation used is the SYD Method.

life of 10 years and a salvage value of 6.633% of the first cost at the end of 10 years. If it has a book value of P58,914 at
of the machine if the constant percentage of declining value is used in the computation for its depreciation.(Matheson’s

o have a life of 10 years. If the annual rate of depreciation is 25%, determine the
he declining balance method.
 00 will have an estimated salvage value of P18,000 at the end of 8 years. Using
ook value and the total depreciation at the end of the 5th year.

of P20,000 and has a salvage value of P1,000 at the end of 10 years. Determine the
ng fund method at 3% interest.

seful life of 8 years with a salvage value of P25,000 at the end of its useful life. If
method is used in the calculation of depreciation?

ic life of 8 years and salvage value of P400 at the end of 8 years. The first year
is used in the calculation of the depreciation?

50,000 and has an economic life of 8 years with a salvage value of P9,000 at that
o P44,475, what method is used in the calculation of the depreciation?

a life of 8 years with a salvage value of P10,000 at the end of its useful life. If the
what method is used in the calculation of depreciation?

s a salvage value of P15,000 at the end of its useful life which is 12 years. If the
ethod is used in computing the depreciation. Assume money is worth 6% annually.

vage value of 10% of its cost at the end of its economic life of 35,000 operating
s. Determine its book value at the end of the first year.
vage value of 10% of its cost at the end of its economic life of 36,000 operating hours in a period of 5 years. In the first
the end of the 2nd year it was used for 15,000 hours, find the depreciation at the second year.

ife of 4 years and a salvage value of P5000. The production output of this machine in units per year is 1000 units for the
its for the third year, and 4000 units for the fourth year. If the units produced are in uniform quality, what is the

with a salvage value of x pesos. The machine is expected to last for 28500 hours in a period of 5 years. In the first year
value at the end of the first year is P220,000, compute for the salvage value x in pesos.

ife of 4 years and a salvage value of P5000. The production output of this machine in units per year is first year 1800
d fourth year 4000 units. If the units produced are of uniform quality, what is the depreciation charge at the end of 4th

age value of P15,000 is expected to last for 285000 hours in a period of 5 years. In
s. Compute the book value of the machine at the end of the first year.

fe of 20,000 hrs. at the end of which its salvage value is P30,000. In the first year,
hrs. Find the second depreciation cost in pesos.

e of 30,000 hrs at the end of which its salvage value is x pesos. In the first year, it
of the first year was P325,120. Find the value of x.

ars ago, a heavy planner for P50,000 with no salvage value. As the life of the planner was 20 years, a straight line
sis. Now the firm wishes to replace the old planner with a new one possessing several advantages. It can sell the old
000. How much new capital will be required to make the purchase?
chase a crane whose capacity is 2000 tons costing P125 per ton. The life was estimated to be 15 years with a salvage
d for the old crane for P80,000. If the depreciation has been figured on a straight line basis what is the difference
ane and its sale value.

ounded continuously for a period of 5 years of an equal payment series if the

unded continuously for a period of 5 years of an equal payment series if the sinking

pital recovery factor of a uniform payment series be equal to 0.218638 if money is

80 employee a holiday bonus. How much is needed to invest monthly for a year at
so that each employee will receive a P2000 bonus?

d want an account that will pay him P25000 a year for the next 15 years. Assuming
unt he would need to deposit now? (The fund will be depleted after 15 years)

in an account which gives a nominal annual interest of 7.5%, compounded

vestment at the end of 15 years.

el far a cash price of P280,000. If purchased in installment, the required down payment is 15% and balance payable in 18
.5% per month. How much will be the required monthly payments?
 ear beginning Jan 1, year 1, in order to accumulate P5,000 on the date of the last

business after 10 years, a fabrication company purchased an adjacent lot for its expansion program where it hopes to put
t will be constructed 10 years after. To provide for the required capital expense, it plans to put up a sinking fund for the
ch year if the interest to be earned is computed at 15%

Social Security System, in the form of calamity loan, with interest at 8% quarterly
ments.

cient, the company has offered a superior yearly gratuity pay of P20,000 for 10 years with the first payment to be made
ead, requested that he be paid a lump sum, on the date of his retirement, having less interest that the company would
basis. If interest is 15%, what is the equivalent lump sum that he could get?

or 6 years, at an annual interest rate of 7%, what is the total peso amount

ver eight years are as follows: P10,000 for the first year, P20,000 for the second year, P50,000 for the third year, and
he 8th year. Find the equivalent annual worth of these payments if the annual interest is 8%.

y for a building renovation,. In order to generate this sum, a sinking fund consisting of three annual payments is
ments will be made after three years. What payments are necessary if money is worth 15% per annum?

0 worth of equipment in year 1970. It decided to use straight line depreciation over the expected 20 year life of the
tax rate is 35% , what is the present worth of the tax shield?
or the purpose of accumulating a sufficient capital to retire its outstanding bonds and maturity. The bonds are
s P150,000. How much should be deposited each year if the fund pays interest at the rate of 3%?

estimated scrap value of P2,000 after 8 years. Inflation is 2% per year. The effective annual interest rate earned on
o be set aside each year to replace the machine with an identical model 8 years from now?

tment. The cost of the machine is P25,000. Each year it operates, the machine generates P15,000. Given an effective
d payback period, in years, on the investment of the machine?

ent in year zero. It decides to use straight line depreciation over the expected 20 year life of the equipment. The interest
s the present worth of the depreciation tax held?

or office space at the beginning of each year for the next 10 years, an engineering firm has decided to take out a 10 year
The firm will invest P100,000 of the rent saved and earned 18% annual interest on that amount. What will be the

100,000 every end of 3 months for x years. However, he may choose to get a single
e rate interest was 14% compounded quarterly, what is the value of x?

0 was bought with a down payment of P162,000 and monthly installments of

rest if compounded monthly?

ty paying P3000 at the end of each year, with interest at 8% compounded

000 for a house and lot and agreed to pay the balance on monthly installments for
onthly. What was the monthly installment on pesos?

100,000 every end of 3 months for 10 years. However, he may choose to get a
ow much is this lump sum if the cost of money is 14% compounded quarterly?

00 for a house and lot and agreed to pay the balance on monthly installments for x
thly. If the monthly installment was P42,821.87, find the value of x.

n on his 21st birthday. How much should he deposit every 6 months in a savings
if the first deposit is made when the son is 3.5 years old?

at the rate of 6% compounded in order to build a house. How much must he pay
0 years?

nnually, find the present value of a sequence of 12 semi-annual payments of P500

ars.

e fund at the end of each year for 6 years. If the fund invested has a rate of interest
orth of this fund at the end of 9 years?

plant must have P30,000 at the end of 9 years. An equal deposit of P2,965 was made on the fund at the end of each 6
the fund invested if it is compounded semi-annually?
 payment and takes out a mortgage for P10,000 on which he agrees to pay P200
rest rate compounded monthly was interest charged on the mortgage?

to withdraw P2000 annually for 10 years if the interest rate is 9%?

mi-annually, what sum must be invested at the end of each 6 months to accumulate

at the end of each 6 months to accumulate P100,000 to initiate a plant overhaul. If

nually, how may years will the fund contain at least P100,000?

0,000 cash, or for P2000 down and payments of P750 per year for 15 years. What

0 years, a man will make equal annual deposit of P606.94 in the fund at the end of
compounded annually?

o purchase a second hand truck for P75,000. A dealer offers cash payment of P5,000 and P6486 per month for 12
ondition with 0.75% interest per month for 12 months of the unpaid balance. Which offer should the engineer choose and

were offered at 10% down payment and P500 per month for 25 years. What is the
balance?

wn payment of P500,000 and a yearly payment P100,000 at the end of each year for a period of 10 years, starting at the
oney is worth 14% compounded
rty?
0 on installment basis at the rate of 10% per annum on the unpaid balance. If he paid a down payment of P120,000 cash
payment for 2 years, what should be his monthly payment?

f fluctuating future budget for the maintenance of the generator. During the first 5 years, P1,000 per year will be
budget will be P1500 per year. In addition, P3500 will be budgeted for an overhaul of the machine at the end of the fourth
d of 8th year. Assuming compounded interest at 6% per annum, what is the equivalent annual cost of maintenance?

s to have to determine what lump sum would have to be paid into an account
rder to withdraw P20,000 each on the child’s 18th, 19th, 20th, and 21st birthdays.

nnually, find the present value of a sequence of 12 semi-annual payments of P500

ars.

terest at the rate of 6% compounded semi-annually. He agrees to discharge his obligation by paying a series of 8 equal
nd of 5.5 years. Find the semi-annual payment.

institution which will be paid after 10 years at an interest rate of 12% compounded
monthly in order to discharge his debt 10 years hence?

e year annuity paying P6000 at the end of each year, with interest at 15%

ischarge the debt by equal payments at the beginning of each 3 months for 8
8% payable quarterly. Find the quarterly payment.
d loan association at the beginning of 3 months for 9 years. If the association pays
to his credit just after the last deposit.

payments of P500 at the beginning of each 3 months for 7 years discharge a debt

was sold at 95%. If miscellaneous initial expenses of the financing were P20,000
s the true cost the company is paying for the money it borrowed?

with a face value of P100,000 which is baring interest of 8% per year payable
arn 6% semi-annually, how much must he pay the certificate?

ertakes the construction of an irrigation project in the province of oriental Mindoro which will cover an area of 10,000
as borrowed from the World Bank at the start of the construction. The construction will last 30 years with no salvage
ounded annually for 30 years. The construction of project will take 4 years. Insurance operation and maintenance of the
king fund is 6%. How much should each hectare be charged?

value each redeemable at par at the end of 15 years to accumulate the funds required for redemption. The firm
posits, the interest rate of the fund being 4%. What was the principal in the fund at the end of 12th year?

me of P15,000,000 per year for 25 years is being considered to be purchased by a group of businessman. If the return on
come and the sinking fund at 18% interest is to be established at recover of investment, how much must be paid to the oil
ich will yield a net income of P200,000 at the end of each year for 10 years and then will become useless. He
pital by annual investments at 4.5%. At what rate(%) does he receive interest on his investment at the end of each year?

mated life of 30 years at a projected annual output of 3000 cubic meters of marble blocks. Estimated management cost
st of the quarry and processing plant is P8000 per cubic meter. The finished products, tiles and slabs, can be sold for
he present valuation of the mineral property if the sinking fund rate of interest is 15% and the annual dividend rate is to

75,000 until the ore is exhausted at the end of 30 days, and the mine becomes useless. Find the price of the mine to yield
nt fund to restore his capital by annual investment at 5%.

ore years and the royalty from it will be P60,000 at the end of each year during that time. Find the value of his patent
n his investment and will accumulate a capital replacement fund at 5%.

000 and the life of the mine is 20 years. Find the price that an investor is willing to pay for the mine if he considers that
nking fund at 6% in order to replace the capital he invested.

last 10 years under a certain soil conditions costs P1200. If a treated pole will last for 20 years, what is the maximum
pole, if the maximum return on investment is 12%? Consider annual taxes and insurance amount to be 1% at first cost.

es in three years. Equipment for the loading dock is being considered for purchase. The original cost is P20,000,000, the
s P8,000. The company’s rate of return on money is 10%. Determine the capital recovery rate per year.

imated life of 15 years and a salvage value of P800 and guaranteed to have an operating cost of P3500 per year. The new
ne. The old engine had a total annual cost of P5,200 to operate. Determine the rate of return of the new investment using
d engine could be sold now for P2000.
hich costs P5000with a life of 2 years and final salvage value of P800. How much could the corporation afford to pay for
e of 3 years with a final salvage value of P1000? Money is worth 4%

s expected to be exhausted at the end of 4 years. If the resale value of the land is
d an investment rate of 12%? Use a sinking fund rate of 3%

a salvage value of P50,000 at the end of its life after 10 years. The annual saving for the use of the machine amount s to
achine is P4000 and the sinking fund to recover depreciation earns 6%, compute for the rate of return of investment.

4,000 and a salvage value of P50,000 at the end of its life of 4 years. If money is
zed cost.

duty trucks for P600,000 each. It is estimated to have a salvage value of P60000 at the end of its life which is 10 years.
ver is estimated to cost an average of P3000 per year. The contractor however can hire a similar truck and its operator
any days per year must the service of the truck be required to justify the buying of the trucks. Use annual cost method.

accomplished by a machine loading into trucks. This machine will cost P20,000 with labor, fuel, oil, and maintenance
e is estimated to be 5 years and no salvage value. The contractor however can hire a similar machine and its operator at
services of the machine be required to justify the purchase of their new machine of the money is worth 10%. Use annual

ck for P500,000. Its estimated life is 8 years and estimated salvage value of P6000. Maintenance is estimated to be
uel maintenance. The contractor can hire a similar unit and driver for P750 a day. If interest is taken at 8%, how many
e required to justify the purchase of a truck? Use annual cost method.
 aintain a section of Kennon road. If money is worth 10%, how much would it pay
P10,000?

rly, what is the present value of the perpetuity of P1,000 payable monthly?

uity of P15,000 payable semi-annually if money is worth 8% compounded

business which cost him P47,000. The net annual return estimated is P14,000 for
t ratio if the annual rate of interest is 18%.

e end of each year for a period of 5 years is equal to P40,000. Assuming money is
nefit cost ratio.

wing project:

uces 100 units per month and sells them at P1,800 each. Dividends are 8% on the 8000 shares with par value of P250
00. Other costs are P1,000 per unit.
were produced per month, determine the profit.
tures electric motor, has a capacity of producing 150 motors a month. The variable costs are P4,000 per month, the
tor. Fixed costs of the company amounts to P78,000 per month which includes all taxes. Determine the number of motors
ales volume in pesos at this point.

of plywood at a labor cost of P0.50 and material at P3.00. The fixed charges on business are P50,000 a month and the
ells for P6.00 each, how many pieces must be produced each month for the manufacturer to break even?

10% of the selling price. What percentage increase in production cost will reduce

assette produces 300 units per month at a cost of P800 per unit. Each stereo radio cassette sells for P1,200. If the firm
par value of P200 per share, and the total fixed cost is P20,000 per month. What is the break even point and how much
in a given month?

and, the labor cost per unit is P0.54 and the annual fixed charge for tool used is estimated at P100 per year. A machine
00, have a salvage value of P100 at any time and a fixed annual cost of P200. With it, labor cost is P0.22 per unit. For
nterest and life of 6 years for the machine will the annual cost of the two methods break even?

oes at a labor cost of P9.00 a pair and a material cost of P8.00 a pair. The fixed charges on the business is P90,000 a
shoes sells at P30 a pair, how many pairs must be produced each month for the manufacturer to break even?

unit wholesale is being produced with the following cost data; labor cost, P10 per unit; material cost, P15.00 per unit;
nit. What is the break even point sales volume and the break even sales volume if one out of every ten units produced is
n materials?
650,000 units of product per year. At present, it is operating at 62% capacity. The firm’s annual income is P4,160,000.
cost is equal to P3.56 per unit of product.
volume of sales does the firm break even?

certain product are P300 and P400 per unit, respectively. Fixed charges are P100,000 per month and other variable costs
per unit, how many units must be produced and sold to break even?

s that it sells for P65.00 each. It costs XYZ P35,000 per year to operate its plant. This sum includes rent, depreciation
cost to produce one bookcase is P50.00, how many cases must be sold each year for XYZ to avoid taking a loss?

n be made up with either enameled wire or tinned wire. There will be 400 soldered connections. The cost of soldering a
n the tinned wire, it will be P1.15. A 100 pair cable made up with enameled wire cost P0.55 per lineal foot and those
Determine the length of cable run in feet so that the cost of each installation would be the same.

otors has a production capacity of 200 motors a month. The variable costs are P150 per motor. The average selling price
amounts to P20,000 per month which included taxes. The number of motors that must be sold each month to break even

xed operating cost of P200,000. Each drum manufactured cost P160 to produce and sells for P200. What is the
per year? If they could manufacture 7,000 drums per year, determine the amount of profit or loss.

onstruction ,material at a labor cost of P16.20 per piece, material cost of P38.50per piece and variable cost of P7.40 per
000 a month. If he sells the finished product at P95.00 each, how many pieces must be manufactured each month to break

labor cost per unit of P315, material cost per unit of P100, variable cost of P3.00
many units must be sold to break even if the monthly overhead is P461,600?
 130 tons per day (24 hrs) of clinker has its burning zone about 45 tons of magnesium chrome bricks being replaced
ors and the life of the bricks. If locally produced bricks cost costing P30,000 per ton and have a life of 6 months,
w much?

etion stage can be completed in 40 days of 8 hour day work, with 40 men working. With the contract expiring in 30 days,
d 10 men on the job, overtime not being permitted. If the liquidated damages is P2,000 per day of delay, and the men are
e if he will add workers?

is required for a proposed manufacturing plant and an estimated working capital of P2,000,000. Annual depreciation is
nt. Determine the rate of return on the total investment and the minimum pay out period if the annual profit is

r kw installed. Fixed charges is 14%, operating cost is P0.013 per kw-hr. The plant averages 150kw for 5000 hour of the
ainder. What is the unit cost of production of electric energy?

P450,000 contract to install the machineries of an oil mill failed to finish the work on time. As provided for in the
to one fourth of one percent per day for the next ten days and one percent per day for every day thereafter. If the total
mpletion of the contract delayed?

gains 20%. The cost of the eggs rises by 12.5%. If he sells at the same price as

alary of a saleslady is partly constant and partly varies as the value of her sales for the month. When the value of her
month is P900, when her monthly sales goes up to P12,000, her monthly salary goes up to P1,000. What must be the
for that month would be P2,000?
etion stage can be completed in 50 days of 8 hour day work, with 50 men working. With the contract expiring in 40 days,
d 15 men on the job, overtime not being permitted. If the liquidated damages is P5,00 per day of delay, and the men are
ve with the additional workers?

nd then sold it to Rudy at a profit of 40%; Rudy then sold the VCR to Noel at a
ost Jojo, how much did Jojo pay for the unit?

of sales. Operating expenses such as sales and administration are 15% of sales.
les is their profit after taxes?

ces tennis rackets for which there is a demand of 200 per month. The production setup cost for each lot of racket is O300.
acket is P24 per year. Using the Economic Order Quantity (EQQ) model, which is the best production batch size fro the

ct assembly line to produce signal generators. Weekly demand for the generators is 35 units. The line operates for 7
mum production time per unit in hours required of the line to meet the demand?

pital after payment of taxes. If the income from an available investment will be
or return, before payment of taxes, must the investment offer to be justified?

purchase. The generator will cost P320,000 with a life expectancy of 10 years, with an efficiency of 82%. The
or is used for 300 hours per year and the cost of fuel, oil is P0.12 per kilowatt-hour. (1 hp = 0.746 kw). Assuming the
e the monthly cost of maintaining the generator?

000. Compute the capitalized cost if the machine has a life of 5 years and a
per annum.
benefit of P80,000 for a period of 10 years with no salvage value at an interest rate

xed capital investment of P120M. The net income after the tax and depreciation is
on cost is 10 % of fixed capital investment. Determine the payout period in years.

to have a book value of P40,545.73 when retired at the end of 10 years.

ercentage of the declining book value. What is the annual rate of depreciation?

ated economic life is 10 years after which it will be sold for P1,000. Find the
line method.

,000. He spent an additional amount of P30,000 for installation and other expenses. The estimated useful life of the
f the first cost. Using the straight line method of depreciation, the book value at the end of 5 years will be P291,500.

ng its installation is P800,000. The BIR approved life of this machine is 10 years for depreciation. The estimated salvage
ntling is estimated to be P15,000. Using straight line depreciation, what is the annual depreciation charge?

ng its installation is P800,000. The BIR approved life of this machine is 10 years for depreciation. The estimated salvage
ntling is estimated to be P15,000. Using straight line depreciation, what is book value of the machine at the end of 6

th an estimated life of 5 years. Its salvage value is P2,500. Find its depreciation rate
 and mill for painting manufacturing cost P360,000. Bank charges and brokerage cost P5,000. Foundation and installation
mount to P20,000. Salvage value of the mills estimated to be P60,000 after 20 years. Find the appraisal value of the mill
ears.

e value of P500 at the end of 10 years. Calculate the annual depreciation cost by

e value of P250 at the end of 10 years. Calculate the annual depreciation cost by

mated economic life is 20 years after which it will be sold for P5,000. Find the
ne method.

s from now for a 12% simple interest and 12% compound interest per

r 9 months at 15% compounded quarterly.

n P5000 and the corresponding amount at the end of 59 days.

5000 and the corresponding amount at the end of 59 days.

at a simple interest for 3 years. What is the rate of interest?

000 investment for the period from January 15, 1996 to October 12, 1996 of the

d from June 21, 1995 to December 25, 1995, is P100. What is the rate of interest?

e bank earning at 7.5% per annum. Determine the total amount at the end of 5
awn during the period.

0.25 years at a rate of 5% compounded monthly.

0.25 years at a rate of 5% compounded quarterly.

0.25 years at a rate of 5% compounded semi-annually.

0.25 years at a rate of 5% compounded daily.

y starting at the end of the third year and continuing to the end of the fourth year, if

be paid in 10 equal payments for 10 quarters. If the interest rate is 10%

is P2,000, how much did he borrow?
quate with a future amount of P20,000? Assume i = 6% annually.

bt of P10,000 payable for 6 years at 12% interest annually.

in P1000 units paying 10% interest in annual payments, must be retired by the use of sinking fund which earns 8%
he interest ad retirement of the entire bond issue.

d receive per period if you purchase a 6%, P5000 bond which matures in 10 years

ing to P100,000 each having a par value of P500, the bond rate is 7.5% and the bonds are to be retired in 5 years, the
e. What is the total payment for the whole period of 5 years?

ok at P200. At what price should this book be sold so that by giving a 20%

f its net cost. If the tv set is sold to a customer at a profit of 25% of the net cost,

ct assembly line to produce signal generators. Weekly demand for the generators is 35 units. The line operates for 7
mum production time per unit in hours required of the line to meet the demand?

% of sales. Operating expenses such as sales and administration are 5% of sales.

sales is their profit after taxes?
 to withdraw P5000 annually for 20 years if the interest rate is 12%?

mi-annually, what sum must be invested at the end of each 6 months to

s?