Kenneth Monares

CEE109(2122) - Activity 2

1. An engineer promised to pay P 36,000 at the end of 90 days. He was offered a 10%
discount if he pays in 30 days. Find the rate of interest.
2. If the inflation rate is 6%, the cost of money is 10%, what interest rate will take care
of inflation and the cost of money.

3. In year zero, you invest P 10,000 in a 15% security for 5 years. During that time, the
average annual inflation is 6%. How much, in terms of year zero will be in the
account at maturity.