Mathematics Review Class 2019| UNC | CEA| PICE- UNC Student Chapter| ENGINEERING ECONOMY: Pre-test

Name: 12.] Mr. Reganit borrows P 100,000 at 13% effective annual

interest. He must pay back the loan over 30 years with
Score: Date: uniform monthly payments due on the first day of each month.
Intructions. Encircle the letter of the right answer. What does Mr. Reganit pay each month?
a. 1050.22 c. 1167.31
1.] Mrs. Tan was granted a loan of P 30,000 by her employer b. 1168.31 d. 1166.31
TQN Construction with an interest of 6% for 180 days on the 13.] A house and lot can be acquired by a down payment of P
principal collected in advance. The corporation would accept a 500,000 and a yearly payment of P 100,000 at the end of each
promissory note for P 30,000 non-interest for 180 days. If year for a period of 10 years, starting at the end of 5 years
discounted would accept a promissory note for P 30,000 non- from the date of purchase. If money is worth 15%
interest for 180 days. If discounted at once, find the proceeds compounded annually, what is the cash price of the property?
of the note. a. 501876.86 c. 786949.72
a. 887.67 c. 867.67 b. 286949.72 d. 601876.86
b. 888.67 d. 857.67 14.] A man paid 10% down payment of P200,000 for a condo
2.] If you borrowed money from your friend with simple unit and agreed to pay the balance on monthly installments
interest of 10%, find the present worth of P 50,000, which is for ”X” years at an interest rate of 15% compounded monthly
due at the end of 7 months. installment was 50,095, find the value of X.
a. 47245.09 c. 47243.09 a. 5 years c. 3 years
b. 47244.09 d. 47242.09 b. 4 years d. 2 years
3.] A bank charges 12% simple interest on a P 500,000 loan. 15.] A manufacturing wishes to give each 80 employees a
How much will be repaid if the loan is paid back in one lump holiday bonus. How much is needed to invest monthly for a
sum after three years? year at a 12% nominal interest rate compounded monthly, so
a. 680000 c. 675000 that each employee will receive a P 2,000 bonus?
b. 685000 d. 670000 a. 12651.81 c. 12561.81
4.] What is the corresponding effective rate of 14% b. 12165.81 d. 12615.81
compounded semi-quarterly? 16.] A machine has an initial cost of P 50,000 and a salvage
a. 14.85% c. 14.87% value of P 5,000 after 10 years. Find the book value after 5
b. 14.86% d. 14.88% years using straight-line depreciation.
5.] Find the present worth of a future payment of P 1,000,000 a. 45500 c. 27500
to be made in 10 years with an interest of 12% compounded b. 22500 d. 41000
quarterly. 17.] An equipment costs P 10,000 with a salvage value of P 750
a. 306555.84 c. 306556.84 at the end of 10 years. Calculate the annual depreciation cost
b. 306556.85 d. 306555.85 by sinking fund method at 4% interest.
6.] On his twelfth birthday a boy is left an inheritance. The a. 770.43 c. 770.45
inheritance will be paid in a lump sum of P 10,000 on his 21st b. 770.44 d. 770.46
birthday. What is the present value of the inheritance as the 18.] A machine costing P 720,000 is estimated to have a book
boy’s 12th birthday, if the interest is compounded annually? value of P 56,123.98 when retired at the end of 10 years.
Assume i= 4%. Depreciation cost is computed using a constant percentage of
a. 7025.86 c. 7520.86 the declining book value. What is the annual rate of
b. 7250.86 d. 7052.86 depreciation in %?
7.] Consider a deposit of P 800 to be paid back in one year by P a. 20.52% c. 26.52%
1000. What are the conditions on the rate of interest, I % per b. 24.52% d. 22.52%
year compounded annually such that the net present worth of 19.] Steel drum manufacturer incurs a yearly fixed operating
the investment is positive? Assume ≥ 0. cost of $200,000. Each drum manufactured cost $150 to
a. 20% c. 25% produce and sells $180. What is the manufacturer’s break-
b. 30% d. 35% even sales volume in drums per year?
8.] A man purchased on monthly installment of P 150,000 a. 6976 c. 6867
worth of land. The interest rate is 18% nominal and payable in b. 6755 d. 6667
20 years. What is the monthly amortization? 20.] A company which manufactures electric motors has a
a. 2341.96 c. 2314.96 production capacity of 200 motors a month. The variable costs
b. 2314.86 d. 2341.86 are P150 per motor. The average selling price of the motors is
9.] You need P 5,000 per year for four years to go to college. P300. Fixed costs of the company amount to P20,000 per
Your mother invested P 10,000 in 7% discount for your month which includes taxes. The number of motors that must
education when you were born. If you withdraw P 5,000 at the be sold each month to break-even is closest to:
end of 17th, 18th, 19th and 20th birthday, how much will be a. 167 c. 187
left in the account at the end of the 21st year? b. 156 d. 162
a. 41405.62 c. 1553.98
b. 22199.71 d. 23753.69
10.] A debt of P 10,000 with 7% 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. 1202.41 c. 1022.41 ****Take your time and review your answers ***
b. 1220.41 d. 1202.41
11.] A man loans P 213,300 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 Jesus saith unto him, I am the way, the truth and the life:
of 10 years. Find the annual payments. no man cometh unto the Father, but by me.
a. 28994.86 c. 51199.18 John 14:6| King James Version (KJV)
b. 51197.18 d. 28995.86