ENGINEERING ECONOMICS

SIMPLE AND COMPOUND INTEREST

ECO-6 10:30 12:00
Quiz #1

PROBLEM 1: (10 pts)

Mr. Juan de la Cruz borrowed money from a bank. He received from the bank an amount of P1,340.00 and promised to pay
P1,500.00 at the end of 9 months. Determine the simple interest rate and the corresponding discount rate or Bankers
discount.

PROBLEM 2: (10 pts)

An engineer promised to pay 36,000 pesos at the end of 90 days. He was offered 10% discount if he pays in 30 days. Find
the rate of interest.

PROBLEM 3: (10 pts)

An initial savings deposit of P80,000 in a certain bank earns 6% interest per annum compound monthly. If the earnings from
the deposit are subject to a 10% tax what would be the net value of the deposit be after three quarters? P82, 938.28

PROBLEM 4: (10 pts)

How long will it take for an investment to double its amount if invested at an interest rate of 6% compounded bi-monthly?

PROBLEM 5: (10 pts)

A P1000 loan was made at 10% simple annual interest.
a. Determine the time in years for the amount of loan and interest be equal to P1700.
b. What is the interest charge after 5 years.
c. What amount that the borrower would be willing to pay after 4 years.

ENGINEERING ECONOMICS
SIMPLE AND COMPOUND INTEREST
ECO-6 10:30 12:00
Quiz #1

PROBLEM 1: (10 pts)

Mr. Juan de la Cruz borrowed money from a bank. He received from the bank an amount of P1,340.00 and promised to pay
P1,500.00 at the end of 9 months. Determine the simple interest rate and the corresponding discount rate or Bankers
discount.

PROBLEM 2: (10 pts)

An engineer promised to pay 36,000 pesos at the end of 90 days. He was offered 10% discount if he pays in 30 days. Find
the rate of interest.

PROBLEM 3: (10 pts)

An initial savings deposit of P80,000 in a certain bank earns 6% interest per annum compound monthly. If the earnings from
the deposit are subject to a 10% tax what would be the net value of the deposit be after three quarters? P82, 938.28

PROBLEM 4: (10 pts)

How long will it take for an investment to double its amount if invested at an interest rate of 6% compounded bi-monthly?

PROBLEM 5: (10 pts)

A P1000 loan was made at 10% simple annual interest.
a. Determine the time in years for the amount of loan and interest be equal to P1700.
b. What is the interest charge after 5 years.
c. What amount that the borrower would be willing to pay after 4 years.
ENGINEERING ECONOMICS
SIMPLE AND COMPOUND INTEREST
ECO-6 7:30 9:00
Quiz #1

PROBLEM 1: (10 pts)

A P1000 loan was made at 10% simple annual interest.
a. Determine the time in years for the amount of loan and interest be equal to P1700.
b. What is the interest charge after 5 years.
c. What amount that the borrower would be willing to pay after 4 years.
(t = 7yrs, I 500, A = 1400)
PROBLEM 2: (10 pts)
An initial savings deposit of P80,000 in a certain bank earns 6% interest per annum compound monthly. If the earnings from
the deposit are subject to a 10% tax what would be the net value of the deposit be after three quarters? P82, 938.28

PROBLEM 3: (10 pts)

Determine the effective rate of P1.00 for one year compounded semi-annually at a nominal rate of 6%.

PROBLEM #4: (10 pts)

Compute the discount if P2000 is discounted for 6 months at 8% simple interest.

PROBLEM 5: (10 pts)

How long will it take for an investment to double its amount if invested at an interest rate of 6% compounded bi-monthly?

ENGINEERING ECONOMICS
SIMPLE AND COMPOUND INTEREST
ECO-6 7:30 9:00
Quiz #1

PROBLEM 1: (10 pts)

A P1000 loan was made at 10% simple annual interest.
a. Determine the time in years for the amount of loan and interest be equal to P1700.
b. What is the interest charge after 5 years.
c. What amount that the borrower would be willing to pay after 4 years.
(t = 7yrs, I 500, A = 1400)
PROBLEM 2: (10 pts)
An initial savings deposit of P80,000 in a certain bank earns 6% interest per annum compound monthly. If the earnings from
the deposit are subject to a 10% tax what would be the net value of the deposit be after three quarters? P82, 938.28

PROBLEM 3: (10 pts)

Determine the effective rate of P1.00 for one year compounded semi-annually at a nominal rate of 6%.

PROBLEM #4: (10 pts)

Compute the discount if P2000 is discounted for 6 months at 8% simple interest.

PROBLEM 5: (10 pts)

How long will it take for an investment to double its amount if invested at an interest rate of 6% compounded bi-monthly?