Engineering Economy

“THE ESTABLISHED LEADER IN EE REVIEW”

LEGIT
MULTIVECTOR
Review and Training Center
Ground Floor, Cuevasville Tower
F. Cayco corner Earnshaw St.
Sampaloc, Manila
Tel. No. (02) 8731-7423
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ENGINEERING ECONOMY

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ENGINEERING ECONOMY
1. Determine the exact and ordinary simple interest on P 500 for the period from Jan 15 to
December 30, 2000 at 10% interest.
A. P47.95, P 48.61 B. P 48.61, P 45.32 C. P 48.54, P 49.75 D. P 47.81, P48.61

REE – Sept. 2014 / Apr. 2016

2. What is the interest of P8,600 after 4 years at 12% simple interest rate?
A. P4,161 B. P4,116 C. P4, 218 D. P4,128

REE – Apr. 2012 / Sept. 2013 / Apr. 2019

3. In how many years will the investment to double in value at 5% simple interest rate?
A. 2 B. 4 C. 20 D. 40

REE – Aug. 2019

4. A student borrows P50,000 from his uncle in order to finish school. His uncle agrees to
charge him simple interest of 5.5% per year. Suppose the student waits two years and
then repays the entire loan. How much will he have to repay?
A. P55,500 B. P60,500 C. P63,500 D. P52,500

REE – May 2010 / Apr. 2019 / Sept. 2021

5. The mathematical expression (1 + i)^n is referred to
A. compounded C. future factor
B. interest factor D. compound amount factor

REE – Apr. 2013

6. What is the factor name for the formula (1 + i)^−n?
A. Uniform gradient future worth C. Single payment present worth
B. Capitol recovery D. Single payment compound amount

REE – Apr. 2016

7. What interest rate compounded monthly is equivalent to an interest rate of 9 percent
compounded quarterly?
A. 9.10 percent B. 9 percent C. 9.31 percent D. 8.93 percent

REE – Aug. 2019

8. An interest rate of 10% compounded semiannually is equivalent to how many percent
compounded quarterly?
A. 10.852% B. 9.878% C. 8.901% D. 7.922%

REE – Sept. 2015 / Apr. 2019

9. What is the effective annual interest rate on a loan if the nominal interest rate is 12% per
year compounded quarterly?
A. 11.75 percent B. 12 percent C. 12.25 percent D. 12.55 percent

REE – Aug. 2019

10. What will P 1,000 be worth after three years if it earns at the rate of 5% compounded
annually?
A. P 1,190.38 B. P 1,157.63 C. P 1,175.00 D. P 1,150.00

REE – Sept. 2011

11. How much should you put into a 7.9% savings account in order to have $ 175,000 in
63 years?
A. $1,541.44 B. $1,454.41 C. $1,342.21 D. $1,356.32

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ENGINEERING ECONOMY
REE – Apr. 2000
12. In year zero, you invest P 10,000.00 in a 15% security for 5 years. During that time, the
average annual inflation is 6%. How much, in terms of year zero pesos, will be in
account at maturity?
A. P 15,386.00 B. P 15,030.00 C. P 13,382.00 D. P 6,653.00

13. A man lends P 600 at 6% simple interest for 4 years. At the end of this time he invests
the entire amount (principal plus interest) at 5% compounded annually for 12 years. How
much will he have at the end of 16 yrs. period?
A. P 1,336.12 B. P 1,624.06 C. P 1,309.72 D. P 1,077.51

14. The accumulated amount after 3 years of P 1,000 invested at the rate of 8% per year
compounded continuously is
A. P 11,023.18 B. P 1,023.18 C. P 2,758.50 D. P 1,271.25

15. An engineer borrowed money from a bank. He received from the bank P 5,430.00 and
promised to repay P 6,500.00 at the end of 9 months. Determine the following:
A. Rate of discount
A. 32.92% B. 16.46% C. 26.27% D. 19.71%

B. Rate of interest
A. 19.71% B. 16.46% C. 26.27% D. 32.92%

C. Rate of interest for one year

A. 16.46% B. 32.92% C. 19.71% D. 26.27%

REE – Sept. 2014

16. What is the corresponding rate of interest for 18 percent simple discount rate?
A. 20.85 percent B. 23.72 percent C. 22.64 percent D. 21.95 percent

REE – Sept. 2015

17. Find the amount of money you have to deposit in order to accumulate P1,500 per
quarter for 10 years with an interest rate of 12 percent compounded quarterly.
A. P4,958.71 B. P4,598.71 C. P34,672.16 D. P36,472.16

REE – Aug. 2019

18. You are thinking about retirement and you are considering investing money each month
so you will have Php 1,000,000 in 30 years. If the nominal annual interest rate is 8% and
the interest is compounded monthly, what is the amount of monthly investment?
A. Php 780.95 B. Php 670.98 C. Php 690.70 D. Php 750.89

REE – Sept. 2017

19. If P 500 is invested at the end of each year for 6 year at an effective annual interest rate
of 7%, what is MOST nearly the total peso amount available upon the deposit of sixth
payment?
A. P 3,000 B. P 4,260 C. P 3,580 D. P 3,210

REE – May 2010

20. A man pays P15,000 annually starting at the end of the 5th year until at the end of the
10th year, P20,000 at the end of the 11th year until at the end of the 15th year, and
P35,000 annually for the succeeding 5 years. With 10% interest, what annuity should he
pay for 20 years to settle that amount equally?
A. P16,850.26 B. P10,625.24 C. P14,208.25 D. P12,405.23
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ENGINEERING ECONOMY
REE – Sept. 2010
21. A 10 thousand pesos loan is to repaid at the rate of 200 pesos per month with an annual
effective rate of 19.56% charged against the unpaid balanced. What principal remains to
be paid after the 3rd payment?
A. P 9,500 B. P 9,800 C. P 8,900 D. P 9,200

REE – Apr. 2017 / Apr. 2019 / Aug. 2019

22. The general manager of the distribution utility wishes to give each of his 50 employees a
holiday bonus. Calculate the amount needed to invest monthly for a year at 12% nominal
monthly, so that each employees will received a P10,000 bonus.
A. P39,424.39 B. P39,241.97 C. P39,607.50 D. P39,791.28

23. A farmer bought tractor costing P 25,000 payable in 10 semi-annual payments, each
installment payable at the beginning of each period. If the rate of interest is 26%
compounded semi-annually, determine the amount of each installment.
A. P 5,280.90 B. P 3,890.30 C. P 3,760.45 D. P 4, 077.20

24. If P 200 is deposited in a savings account at the beginning of each 15 years and the
account draws interest at 7% per year, compounded annually, the value of the account
at the end of 15 years will be most nearly
A. P 5,000 B. P 5,400 C. P 6,000 D. P 6,900

REE – Sept. 2017 / Sept. 2018 / Apr. 2019

25. What is the present worth of a P 100 annuity starting at the end of the third year and
continuing to the end of the fourth year, if the annual interest rate is 8%?
A. P 122 B. P 153 C. P 160 D. P 162

26. The city wishes to set up a retirement fund. At 10% interest rate compounded
continuously, how large a fund in millions of pesos is required to guarantee an average
annual retirement income of P 20,000.00? 3,000 retirees are expected to participate.
A. P 600 M B. P 590 M C. P 580 M D. P 570 M

REE – Oct. 2000 / Sept. 2004 / May 2008

27. Supposed a man receives an initial annual salary of P 60,000 increasing at a rate of
P 5,000 a year. If money is worth 10%, determine his equivalent uniform salary for a
period of 8 years.
A. P 73,022.66 B.P 74,022.66 C. P 76,022.78 D. P 75,022.39

REE – Sept. 2016

28. What is the formula for a straight-line depreciation rate?
A. C.

B. D.

REE – Oct. 2000 / Apr. 2001 / Apr. 2004

29. Is the worth of property as shown in the accounting records.
A. Scrap Value B. Book Value C. Fair Value D. Use Value

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REE – Oct. 2000 / Apr. 2001 / Apr. 2004
30. Is the worth of property which is equal to the original cost less the amount which has
been charged to depreciation.
A. Scrap Value B. Book Value C. Fair Value D. Use Value

REE – Sept. 2017

31. An electrical equipment is purchased at a cost of P10,000. It has a 10 year life and a
salvage value of P500. What is the book value of the equipment after 3 years using
straight line depreciation?
A. P7,100 B. P7,200 C. P7,150 D. P7,250

REE – Apr. 2007

32. It is interest earning with equal deposit made at equal interval time.
A. amortization B. dividend C. sinking fund D. depletion

REE – Apr. 2001

33. A certain machinery cost P 50,000 lasts 12 years with a salvage value of P 5,000.
Money is worth 5% if the owner decides to sell if after using it for 5 years. What should
his price be so that he will not lose or gain financially in the transactions?
A. P 44,378.01 B. P 34,578.75 C. P 34,378.25 D. P 44,578.67

34. A machine costs P 50,000, last 10 years and has a salvage value at the end of life of P
5,000. Determine the depreciation charge during the 5th year and the book value at the
end of 5 years by SYD method.
A. P 4,909.091, P 32,727.273 C. P 3,908.091, P 35,285.254
B. P 4,909.091, P 17,272.73 D. P 4,505.091, P 21,235.528

REE – Apr. 2001 / Sept. 2003

35. Is a measure of the effectiveness of an investment of a capital.
A. Rate of Return C. Annual Worth Method
B. Effective Interest Rate D. Principal or Present Worth Method

36. A machine cost P 50,000 and has an expected life of ten years. The salvage value is
estimated to be P 2,000 and annual operation costs are estimated at P 1,000. What is
the appropriate rate of return on the investment if the annual revenue is P 10,000?
A. 12% B. 11% C. 13% D. 14%

REE – Apr. 2001 / Apr. 2004

37. The total income equals the total operating cost.
A. Break-even-no-gain-no-loss C. Interest Rate
B. In-piece-value D. Scrap Value

38. A shoe manufacturer produces a pair of shoes at a labor cost of P 8.50 and materials
cost P 23.50, the fixed charges on the business are P 10,125 a month and the variable
costs are P 2.50 a pair. If the shoes sell to retailers for P 48.00 a pair, how many pairs
must be produced and sold each month for the manufacturer to break even?
A. 1000 B. 250 C. 750 D. 450

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