Alido, Kevin F.

PetE-3306

ENGG 404

CHAPTER TEST #2

1. You loan from a bank the amount of P100,000 with a rate of simple interest of 20%
butthe interest was deducted from the loan at the time the money was borrowed. If at the
end of 1 year, you have to pay the full amount of P100,000, what is the actual rate of
interest?
2. Mr. Dee Jay borrowed money from the bank and he received the amount of P18,420 and
promised to repay P20,000 at the end of 10 months. Determine the rate of simple interest.
3. Assume you put $10,000 into a bank account. How much will your investment be worth
after 10 years at an annual interest rate of 5% compounded monthly?.
4. Find the nominal rate compounded monthly which is equivalent to 16% compounded
quarterly. What is the corresponding effective rate?
5. Mr. Reyes borrows P600,000 at 12% compounded annually, agreeing to repay the loan in
15 equal payment. What is the value of equal payment and the accumulated amount?
6. If P25,000 is deposited now into a savings account that earns 6% per year, what uniform
amount could be withdrawn at the end of each year for 10 years so that nothing would be
left on the account after 10th withdrawal.
7. A man invests P50,000 now for the college education of his son. If the fund earns 14%
effective, how much will the son get each year starting from his 17th to 22nd birthday?