ECEA110 FE Prob Solving.pdf

1. A man deposits P10,000 at 12 percent simple interest. What is the future amount after 5 years and 5 months using ordinary simple interest. A. P22,500 B. P18,500 C. P20,500 D. P16,500 Answer: D 2. In a loan with 20% simple interest, the future amount is P2,000 more than the prin...

1. A man deposits P10,000 at 12 percent simple interest. What is the future amount after 5 years and 5 months using ordinary simple interest. A. P22,500 B. P18,500 C. P20,500 D. P16,500 Answer: D 2. In a loan with 20% simple interest, the future amount is P2,000 more than the principal after one year. What is the principal amount? A. P17,000 B. P10,000 C. P15,000 D. P35,000 Answer: B 3. A worker borrowed money on April 20, 1995 and promised to pay P18,000 on March 4, 1996 with 16% interest. Determine the money he has borrowed using exact interest. A. P24,987.34 B. P17,678.98 C. P15,791.75 D. P32,123.34 Answer: C 4. An amount of P1,000 becomes P1,608.44 after 4 years compounded bimonthly. Find the nominal interest. A. 12.00% B. 11.89% C. 12.08% D. 12.32% Answer: A 5. 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. P1,494.52 D. P1,378.98 Answer: C 6. 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: C 7. 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. P17,504.13 C. P17,404.12 D. P17,604.34 Answer: B 8. 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 that will be available in two years? A. P13,486.73 B. P13,272.22 C. P13,941.44 D. P13,089.32 Answer: A 9. Gabriel borrows P100,000.00 at 10% effective annual interest. He must pay back the loan over 30 years with a uniform monthly payment due on the first day of each month. What does Gabriel pay each month? A. P850.12 B. P838.86 C. P849.12 D. P840.21 Answer: B 10. A machine costs P8,000 and an estimated life of 10 years with a salvage value of P500. What is the book value after 8 years using the straight-line method? A. P2,000 B. P2,100 C. P2,200 D. P2,300 Answer: A 11. An asset is purchased for P500,000. The salvage value in 25 years is P100,000. What is the total depreciation in the first three years using straight-line method? A. P45,000 B. P46,000 C. P48,000 D. P47,000  Answer: C 12. 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 B. P31,000 C. P30,500 D. P31,500 Answer: A 13. 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. P146,400 B. P148,000 C. P146,000 D. P148,400 Answer: C 14. A machine has 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? A. 10% B. 8% C. 7% D. 9% Answer: B