BATAAN PENINSULA STATE UNIVERSITY

COLLEGE OF ENGINEERING
& ARCHITECTURE
City of Balanga 2100 Bataan
PHILIPPINES

– MODULE EXERCISES –
Engineering Economics

1. P 4,000 is borrowed for 75 days at 16 % per annum simple c. P 7,326

interest. How much will be due at the end of 75 days? d. P 7,362
a. P 4,1333.33
b. P 4,333.33 10. If P500,000 is deposited at a rate of 11.25% compounded
c. P 4,166.67 monthly, determine the compounded interest after 7 years
d. P 4,150.00 and 9 months.
a. P 660,550
2. A deposit of P 110,000 was made for 31 days. The net b. P 670,650
interest after deducting 20 % withholding tax is P 890.36. c. P 680,750
Find the rate of return annually. d. P 690,850
a. 11.95 %
b. 12.75 % 11. P1,500.00 was deposited in a bank account, 20 years ago.
c. 11.75 % Today it is worth P3,000.00. Interest is paid semi-annually.
d. 12.25 % Determine the interest rate paid on this account.
a. 3%
3. A man borrowed P 20,000 from a local commercial bank b. 2.9%
which has a simple interest of 16 % but the interest is to c. 3.5%
be deducted from the loan at the time that the money was d. 4%
borrowed and the loan is payable at the end of one year.
How much is the actual rate of interest. 12. By the condition of a will, the sum of P20,000 is left to a
a. 12 % girl to be held in trust fund by her guardian until it amounts
b. 14 % to P50,000. When will the girl receive the money if the
c. 10 % fund is invested at 8% compounded quarterly?
d. 19 % a. 7.98 years
b. 10.34 years
4. A man borrowed P 100,000 at the interest rate of 12 % per c. 11.57 years
annum, compounded quarterly. What is the effective rate? d. 10.45 years
a. 3.0 %
b. 13.2 % 13. What is the present worth of two P100 payments at the
c. 12.0 % end of the third year and fourth year? The annual interest
d. 12.55 % rate is 8%.
a. P 153
5. The amount of P12,800 is 4 years at 5% compounded b. P 160
quarterly is c. P 162
a. P 14,785.34 d. P 127
b. P 15,614.59
c. P 16,311.26 14. A man purchased on monthly installment a P100,000
d. P 15,847.33 worth of land. The interest rate is 12% nominal and
payable in 20 years. What is the monthly amortization?
6. On his 6th birthday a boy is left an inheritance. The a. P 1,101.08
inheritance will be paid in a lump sum of P10,000 on his b. P 1,121.01
21st birthday. What is the present value of the inheritance c. P 1,152.15
as of the boy’s 6th birthday, if the interest is compounded d. P 1,128.12
annually? Assume i = 4%.
A. P 6,500 15. Money borrowed today is to be pain in 6 equal payments
B. P 8,600 at the end of 6 quarters. If the interest is 12% compounded
C. P 5,500 quarterly. How much was initially borrowed if quarterly
D. P 7,500 payment is P 2000.00?
a. P 10,834.38
7. Alexander Michael owes P25,000.00 due in 1 year and b. P 10,382.90
P75,000 due in 4 years. He agrees to pay P50,000.00 c. P 10,586.99
today and the balance in 2 years. How much must he pay d. P 10,200.56
at the end of two years if money is worth 5% compounded
semi-annually? 16. You need P 4,000 per year for four years to go to college.
a. P 38,025.28 Your father invested P 5,000 in 7% account for your
b. P 35,021.25 education when you were born. If you withdraw P 4,000 at
c. P 30,500.55 the end of your 17th, 18th, 19th and 20th birthday, how much
d. P 39,201.28 will be left in the account at the end of the 21st year?
a. P 1,700
8. How long (in years) will it take money to quadruple if it b. P 2,500
earns 7% compounded semi-annually? c. P 3,400
a. 20.15 d. P 4,000
b. 26.30
c. 33.15 17. How much must be deposited at 6% each year beginning
d. 40.30 on January 1, year 1, in order to accumulate P5,000 on
the date of the last deposit, January 1, year 6?
9. A company invests P10,000 today to be repaid in 5 years a. P 751.00
in one lump sum at 12% compounded annually. How much b. P 717.00
profit in present day pesos is realized? c. P 715.00
a. P 7,623 d. P 725.00
b. P 7,236

CECE0103 • CE Competency Enhancement 1 Department of Civil Engineering

 BATAAN PENINSULA STATE UNIVERSITY

COLLEGE OF ENGINEERING
& ARCHITECTURE
City of Balanga 2100 Bataan
PHILIPPINES

18. A person buys a piece of lot for P 100,000 downpayment

and 10 deferred semi-annual payments of P 8,000 each, 26. A company purchases an asset for P 10,000.00 and plans
starting three years from now. What is the present value of to keep it for 20 years. If the salvage value is zero at the
the investment if the rate of interest is 12% compounded end of 20th year, what is the depreciation in the third year?
semi-annually? Use SYD method.
a. P 134,666.80 a. P 1,000.00
b. P 143,999.08 b. P 857.00
c. P 154,696.80 c. P 937.00
d. P 164,969.80 d. P 747.00

19. A man loans P 187,400 from a bank with interest at 5% 27. The maintenance cost for a sewing machine this year is
compounded annually. He agrees to pay his obligations by expected to be P 500. The cost will increase P 50 each
paying 9 equal annual payments, the first being due at the year for the subsequent 9 years. The interest is 8%
end of 10 years. Find the annual payments. compounded annually. What is the approximate present
a. P 44,982.04 worth of maintenance for the machine over the full 10-year
b. P 56,143.03 period?
c. P 62,334.62 a. P 4,700
d. P 38,236.04 b. P 5,300
c. P 4,300
20. A housewife bought a brand-new washing machine costing d. P 5,500
P 12,000 if paid in cash. However, she can purchase it on
installment basis to be pain within 5 years. If money is 28. A corporation uses a type of motor truck which costs P
worth 8% compounded annually, what is her yearly 5,000 with life of 2 years and final salvage value of P 800.
amortization if all payments are to be made at the How much could the corporation afford to pay for another
beginning of each year? type of truck of the same purpose whose life is 3 years
a. P 2,782.85 with a final salvage value of P 1,000. Money is worth 4%.
b. P 2,872.58 a. P 8,450.66
c. P 2,400.00 b. P 7,164.37
d. P 2,827.58 c. P 6,398.24
d. P 9,034.56
21. A house and lot can be acquired by a downpayment of P
500,000 and a yearly payment of P 100,000 at the end of 29. The annual maintenance cost of a machine shop is P
each year for a period of 10 years, starting at the end of 5 69,994. If the cost of making a forging is P56 per unit and
years from the date of purchase. If money is worth 14% its selling price is P 135 per forged unit, find the number of
compounded annually, what is the cash price of the units to be forged to break-even.
property? a. 886 units
a. P 810,1000 b. 885 units
b. P 808,811 c. 688 units
c. P 801,900 d. 668 units
d. P 805,902
30. A company which manufactures electric motors has a
production capacity of 200 motors a month. The variable
22. A unit of welding machine cost P 45,000 with an estimated costs are P 150.00 per motor. The average selling price of
life of 5 years. Its salvage value is P 2,500. Find its the motors is P 275.00. Fixed costs of the company
depreciation rate by straight-line method. amount to P 20,000 per month which included taxes. The
a. 17.75% number of motors that must be sold each month to break
b. 19.88% even is closes to:
c. 18.89% a. 40
d. 15.56% b. 150
c. 80
23. A machine has an initial cost of P 50,000 and a salvage d. 160
value of P 10,000 after 10 years. Find the book value after
5 years using straight-line depreciation.
a. P 12,500
b. P 30,000
c. P 16,400
d. P 22,300

24. An equipment costs P 10,000 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. P 791.26
b. P 950.00
c. P 971.12
d. P 845.32

25. 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

CECE0103 • CE Competency Enhancement 1 Department of Civil Engineering