Econ Problems

1.
A loan of Php50,000 is made for a period of

13 months, from April 1 to April 30 of the
following year, at a simple interest rate of 20%.
What future amount is due at the end of the
loan period?
4. What is the interest due on a Php1,500 loan
for 4 years and three months if it bears 12%
ordinary simple interest?
2. What is the principal amount if the amount of

interest at the end of 2 ½ years is Php450 for a
simple interest rate of 6% per annum?
5. Determine the exact simple interest of

Php4,000 for the period of Feb. 14, 1984 to
November 30, 1984, if the rate of interest is
18%.
3. the exact simple interest of Php25,000 for

the period of December 27, 2002 to March 23,
2003, if the rate of interest is 10%.
6. What rate of interest compounded annually
must be received if an investment of Php5,400
made now will result in a receipt of Php7,200 5
years hence?
9. How much should Engr. Cruz deposit now, if

after 10 years, this will amount to Php100,000.
Interest rate is 12% compounded
semiannually?
7. What amount will be accumulated by ‘

Php4,100 in 10 years at 6% compounded
annually?
10. If Php1,000 becomes Php5,734 after 15

years, when invested at an unknown rate of
interest compounded semi-annually, determine
the unknown nominal rate and corresponding
8. What effective annual interest rate effective rate.
corresponds to the following situations?
a. nominal interest rate of 10%

compounded semi-annually
b. nominal interest rate of 6%

compounded monthly
c. nominal interest rate of 8%

compounded quarterly
11. Jay wishes his son, Jason, to receive 13. Acosta Holdings borrowed Php9,000 from
Php1,000,000 twenty years from now. What Smith Corporation on January 1, 1998 and
amount should he invest now, if it will earn Php12,000 on January 1, 2000. Acosta
interest of 12% compounded annually during Holdings made a partial payment of Php7,000
the first five years and 10% compounded on January 1, 2001. It was agreed that the
monthly for the remaining years. balance of the loan would be amortized by two
payments, one on January 1, 2002 and one on
January 1, 2003, the second being 50% larger
than the first. If the interest rate is 12%, what is
the amount of each payment?
12. Find the present worth of a future payment 14. A contract has been signed to lease a
of Php300,000 to be made in 10 years with an restaurant at Php20,000 per year with annual
interest rate of 10% compounded annually. increase of Php1,500 for 8 years. Payments
What will be the amount if it will be paid 5 are to be made at the end of each year,
years later (on the 15ᵗʰ year)? starting one year from now. The prevailing rate
is 7%. What lump sum paid today would be
equivalent to the 8 year lease program?
15. Mr. Cruz buys a second hand car worth 17. Which is more advisable to invest
Php150,000 if paid in cash. On installment Php5,000 for five (5) years, to bank A that
basis, he pays Php50,000 down payment, offers 5% compounded continuously or to bank
Php30,000 at the end of one year, Php40,000 B that offers 10% simple interest?
at the end of two years and a final payment at
the end of four years. Find the final payment if
interest is 14%.
16. Philip invested $100 on a bank. The bank 18. Ms. Glydel Marquez borrowed money from
offers 5% interest compounded continuously in a bank. She received from the bank Php1,342
a savings account. Determine (a) how long will and promised to repay Php1,500 at the end of
it require for him to earn $5 (b) the equivalent 9 months. Determine the following: (a) simple
simple interest rate for 1 year of the bank. interest rate (b) discount rate or often referred
as Banker’s discount.
19. What is the current value of a $50 payment 21. Maintenance cost for a small bridge
to be made at the end of each of the next expected to last for 60 years is estimated
three years if the prevailing rate of to be Php1,000 each for the first 5 years,
interest is 7% compounded annually? followed by a Php10,000 expenditure in the
15ᵗʰ year and Php10,000 in the 30ᵗʰ year. If
interest is 10% per year, what is the
equivalent uniform annual cost over the 60
year period?
20. An obligation of Php20,000 is to be repaid 22. What is the equivalent previous worth of
in uniform annual amounts each of which Php500 annuity to be paid constantly in
included repayment of the debt and interest 60 years 72 years ago, if annual interest is
over a period of 5 years. If interest is 10% 1%?
per year, what is the annual payment?
23. Find the annual payment to extinguish a 26. Find the value of x in the cash flow
debt of Php10,000 payable for 5 years at 12% diagram, given that would make the
interest. equivalent present worth of the cash flow
diagram to Php22,000 and interest rate is
at 13% per year.
24. A savings loan is made between a man 27. Determine the uniform annual payments
and banker. What should be the uniform which would be equivalent to the cash flow
monthly payment that the man should make diagram given. Interest rate of 12% per
if he is to borrow Php50,000 and he is to pay year.
in 10 years? Interest is taken as 6%
compounded quarterly.
25. What annuity is required over 10 years to 28. What is the current value of a $50 payment
equate with the future amount of Php15,000. to be made at the beginning of each year, for
Assume i = 5%. three years if the prevailing rate of
interest is 7% compounded annually?
29. What is the accumulated value of a $25 31. Don Jose deposited Php5,000,000 on a
payment to be made at the beginning of bank that earns 10% compounded
each of the next three years if the annually. Five years later he died. His will
prevailing rate of interest is 9% compounded states that his beneficiary is an orphanage
annually? which will be receiving the money in
perpetuity a year after he died. How much is
the yearly fund the orphanage will be
receiving?
30. How much should Mr. Sy invest on a bank 32. If money is worth 8% compounded
that offers 10% interest so that he would quarterly, compute the present value of the
earn Php1,000 each year in perpetuity. perpetuity of Php1,000 payable quarterly.
33. Prepare a depreciation table for an asset 35. A machine which costs Php10,000 was
which was bought at Php15,000 and useful sold as scrap after being used for 10
for a period of 7 years. Estimated salvage years. If the scrap value was Php500,
value is 10% of its original cost. determine the total depreciation and book
value at the end of the 5ᵗʰ year.
36. Delivery jeeps purchased by KH Company

cost Php180,000 each. Past records indicate
that jeeps should have an economic life of
10 years. They can be sold from an average
of Php50,000 each year after 10 years of use.
The company receives 9% interest on
investment funds. Using straight line method:
34. Equipment bought for Php60,000 is Determine:
expected to last for 30 years. If the book a. the depreciation charge during 3 years
value after 20 years is Php20,000, how much b. the depreciation reserve accumulated at
is the depreciation each year? Find the book the end of 3 years
value after 10 years. c. book value at the end of 3 years.
37. A machine worth Php800,000 is bought 39. An industrial plant bought a generator set
from China. Freight charges amount to for Php90,000. Other expenses including
Php200,000. If the scrap value of the installation amounted to Php10,000. The
machine is Php50,000 that occurs at the generator set is to have a life of 17 years with a
end of 17 years. Compute (a) the depreciation salvage value at the end of life at Php5,000.
and (b) book value at the end of 11 years. Determine the depreciation charge during the
13ᵗʰ year and the book value at the end of 13
years by:
(a) Declining balance method
(b) Double declining balance method
(c) Sum-of-Years’ digit method
38. Equipment bought for Php60,000 is 40. A broadcasting company purchased an

expected to last for 30 years. If the scrap equipment for Php53,000 and paid Php1,500
value after 20 years is Php20,000. How for freight and delivery charges to the job site.
much is the depreciation for year 10? The equipment has a normal life of 10 years
with a trade-in value of Php5,000 against the
purchase of a new equipment at the end of the
life. Determine the annual depreciation cost
using:
(a) straight line method
(b) sinking fund method assuming interest
is 6% compounded annually
41. An electric bulb bought for Php100 is 42. A tire bought for Php1,000 is expected to
guaranteed to be useful for 50 hours. A be useful in traveling 100 km after which it
certain company uses the said bulb for 10 can be sold as scrap for Php50. (a) If the
hours a day. If there is no scrap value for the pedometer displays a value of 85 km, what is
bulb. Compute the daily depreciation and the book value of the tire? (b) How much did
create the depreciation table throughout its the owner need to travel for the tire to amount
economic life. to Php80?

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1.

A loan of Php50,000 is made for a period of

2. What is the principal amount if the amount of

5. Determine the exact simple interest of

3. the exact simple interest of Php25,000 for

9. How much should Engr. Cruz deposit now, if

7. What amount will be accumulated by ‘

10. If Php1,000 becomes Php5,734 after 15

a. nominal interest rate of 10%

b. nominal interest rate of 6%

c. nominal interest rate of 8%

36. Delivery jeeps purchased by KH Company

38. Equipment bought for Php60,000 is 40. A broadcasting company purchased an

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