ENGECON: Engineering Economics

QUIZ NO. 1M

Instructions: Solve the given problems on a separate sheet/s of long bond paper and
encircle your final answer. Show all necessary solution/computations and diagrams. Write
legibly and avoid erasures. Do not use pencil for your solutions. No solution, No credit. Save
your Output as a PDF File

1. Determine the exact simple interest on 5,000 pesos for the period from January 15 to
June 20, 1993 if the rate of simple interest is 14%.
2. In how many years will your money be doubled if it earns 12% interest compounded
annually?
3. At a certain interest rate compounded quarterly, 1,000 pesos will amount to 4,500 pesos
in 15 years. What is the amount at the end of 10 years?
4. Maria invests 5,000 dollars in an account that earns 3.5% interest compounded
continuously.
a. What is the total amount of his investment after 3 years?
b. How long will it take him to earn 15,000 dollars?
5. What is the present worth of a 10 year annuity paying 10,000 pesos at the end of each
year, with interest at 15% compounded annually?
6. A man paid 10% downpayment of 200,000 pesos for a house and lot and agreed to pay
the balance of monthly instalments for 5 years at an interest rate of 15% compounded
monthly. What was the monthly instalment in pesos?
7. A chemical engineer wished to accumulate a total of 50,000 pesos in a savings account at
the end of 10 years. If the bank pays only 5% compounded quarterly, what should be the
initial deposit?
8. A man wishes to bequeath to his daughter 20,000 pesos ten years from now. What
amount should he invest now if it will earn interest of 8% compounded annually during the
first 5 years and 12% compounded quarterly during the next 5 years?
9. Calculate the effective interest rate per month for an interest rate of 14% in continuously
compounded account?
10. ESSAY: What is the importance of Engineering Economy to our Profession as Engineers?
Provides examples to support your claim. Write a paragraph consisting of not more than
1000 words but not less than 500 words.