Engineering Economy Assignment:

1. What is the annual rate of interest if P265 is earned in four months on an

investment of P15,000?
Let n be the number of interest period:
n = 4/12 =
the rate of interest:
i = [P265/P15,000](1/3) = 0.053
=5.3% annual interest

2. A loan of ?2,000 is made for a period of 13 months, from january 1 to january

31 the following year at a simple interest rate of 20% what future amount is
due at the end of the loan period?
n be the number of interest period:
n = 13/2
F=P(1+ni)
F = P2,000[1+(13/12)(0.02)] = P2,433.33

3. If you borrow money from your friend with simple interest of 12%, find the
present worth of 20,000, which is due at the end of nine months
N be the number of onterest period:
N = 9/12 =
P = F(1 + ni)-1
P= P20,000[1+(3/4)(0.12)]-1 = P18,348.62