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Questions and Answers
What is the future amount after 5 years and 5 months using ordinary simple interest on a deposit of P10,000 at 12 percent?
What is the future amount after 5 years and 5 months using ordinary simple interest on a deposit of P10,000 at 12 percent?
- P22,500
- P16,500 (correct)
- P20,500
- P18,500
What is the principal amount in a loan with 20% simple interest where the future amount is P2,000 more than the principal after one year?
What is the principal amount in a loan with 20% simple interest where the future amount is P2,000 more than the principal after one year?
- P10,000 (correct)
- P15,000
- P17,000
- P35,000
Determine the money a worker has borrowed if he promised to pay P18,000 on March 4, 1996, with 16% interest, after borrowing on April 20, 1995.
Determine the money a worker has borrowed if he promised to pay P18,000 on March 4, 1996, with 16% interest, after borrowing on April 20, 1995.
- P17,678.98
- P24,987.34
- P15,791.75 (correct)
- P32,123.34
What is the nominal interest if an amount of P1,000 becomes P1,608.44 after 4 years compounded bimonthly?
What is the nominal interest if an amount of P1,000 becomes P1,608.44 after 4 years compounded bimonthly?
How much must be invested on January 1, 1998, in order to accumulate P2,000 on January 1, 2003, if money is worth 6%?
How much must be invested on January 1, 1998, in order to accumulate P2,000 on January 1, 2003, if money is worth 6%?
What is the effective annual interest rate for an interest rate quoted as 7.5% compounded quarterly?
What is the effective annual interest rate for an interest rate quoted as 7.5% compounded quarterly?
How much did a businessman borrow if he is to pay in 10 equal payments of P2,000 for 10 quarters at a 10% interest rate compounded quarterly?
How much did a businessman borrow if he is to pay in 10 equal payments of P2,000 for 10 quarters at a 10% interest rate compounded quarterly?
What will be the amount available in two years if Jason 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 available in two years if Jason plans a deposit of P500 at the end of each month for 10 years at 12% annual interest, compounded monthly?
What does Gabriel pay each month if he borrows P100,000.00 at 10% effective annual interest over 30 years with uniform monthly payments?
What does Gabriel pay each month if he borrows P100,000.00 at 10% effective annual interest over 30 years with uniform monthly payments?
What is the book value after 8 years of a machine that costs P8,000 and has an estimated life of 10 years with a salvage value of P500 using the straight-line method?
What is the book value after 8 years of a machine that costs P8,000 and has an estimated life of 10 years with a salvage value of P500 using the straight-line method?
What is the total depreciation in the first three years using the straight-line method for an asset purchased for P500,000 with a salvage value of P100,000 over 25 years?
What is the total depreciation in the first three years using the straight-line method for an asset purchased for P500,000 with a salvage value of P100,000 over 25 years?
What is the book value after 5 years if a machine has an initial cost of P50,000 and a salvage value of P10,000 after 10 years using straight-line depreciation?
What is the book value after 5 years if a machine has an initial cost of P50,000 and a salvage value of P10,000 after 10 years using straight-line depreciation?
What is the book value at the end of the fourth year for equipment costing P500,000 with an installation cost of P30,000 and a salvage value of 10% of equipment cost after 5 years using the straight-line method?
What is the book value at the end of the fourth year for equipment costing P500,000 with an installation cost of P30,000 and a salvage value of 10% of equipment cost after 5 years using the straight-line method?
What is the straight-line depreciation rate as a percentage of initial cost for a machine with an initial cost of P50,000 and a salvage value of P10,000 after 10 years?
What is the straight-line depreciation rate as a percentage of initial cost for a machine with an initial cost of P50,000 and a salvage value of P10,000 after 10 years?
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Study Notes
Simple Interest and Future Amounts
- Future amount of P10,000 at 12% simple interest after 5 years and 5 months is P16,500.
- In a loan with 20% simple interest, if the future amount exceeds the principal by P2,000 after one year, the principal is P10,000.
- A worker borrowed and must pay back P18,000 with 16% interest in less than a year, indicating he borrowed P15,791.75.
Compounding and Interest Rates
- An investment of P1,000 grows to P1,608.44 in 4 years with bimonthly compounding; the nominal interest is 12.00%.
- To accumulate P2,000 by January 1, 2003, an investment of P1,494.52 on January 1, 1998, is necessary at a 6% interest rate.
- The effective annual interest rate for 7.5% compounded quarterly is 7.71%.
Loan Repayment
- A businessman’s loan of P2,000 quarterly repayments at 10% compounded quarterly totals P17,504.13.
- Gabriel’s monthly payment on a P100,000 loan at 10% effective annual interest over 30 years is P838.86.
Depreciation and Asset Valuation
- The book value of a machine costing P8,000 with a salvage value of P500 after 8 years using straight-line method is P2,000.
- Total depreciation of a P500,000 asset with a salvage value of P100,000 in 3 years is P48,000.
- A machine initially costing P50,000 with a salvage value of P10,000 has a book value of P30,000 after 5 years using straight-line depreciation.
- The book value of equipment costing P500,000 and installation of P30,000 after 4 years is P146,000 with straight-line method.
- The straight-line depreciation rate of a P50,000 machine with a P10,000 salvage value is 8%.
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