Republic of the Philippines

PHINMA – Araullo University

Cabanatuan City
NAME: .
SECTION: .
ECO 017 – ENGINEERING ECONOMICS

QUIZ # 5
SET A
Write your final answer below the questions

1. An employee is earning Php 18,000.00 a month and he can only afford to

purchase a car, which will require a down payment of Php 85,000.00 and a
monthly amortization of 30% of his monthly salary. What would be the maximum
cash value of a car he can purchase if the seller will agree to a down
payment of Php 85,000.00 and a balance payable in 4 years at 18% per year
payable on a monthly basis? The first payment will be due at the end of the
first month.
Ans: Php 268,830

2. Peter borrows Php 1,000.00 from a bank on the first days of the month. The
interest is computed at the end of every month on the amount he still owed at
the rate of 1.5% per month. Peter pays x pesos at the end of the first month,
another x pesos at the end of second month and another x pesos at the end of
third month. Peter has completely paid off the debt completely at the end of
3rd month. Find the value of x.
Ans: Php 3,434

3. A one-bagger concrete mixer can be purchased with a down payment of Php

8,000 and equal installment of 600 per paid at the end of every month for the
next 12 months. If the money is worth 12% compounded monthly, determine the
equivalent cash price of the mixer.
Ans: Php 14,753.05

4. Mr. Zilong invests Php 10,000.00 for the college education of his 2-year
old son. If the fund earns 14% effective, how much will the son get each year
starting from his 18th to the 2nd birthday?
Ans: Php 20,791.64

5. A person buys a piece of property for Php 100,000.00 down payment and ten
deferred semi-annual payments of Php 8,000.00 each starting three years from
now. What is the present value of the investment if the rate of interest is
12% compounded semi-annually?
Ans: Php 143,999.08
6. A service car whose cash price was Php 540,000.00 was bought with a down
payment of Php 162,000.00 and monthly of Php 10,874.29 for five years. What
was the rate of interest compounded monthly?
Ans: 24%

7. In five years P18,000 will be bedded to pay for a building renovation. In

order to generate this sum an annuity consisting of three annual payments is
established now. What payment is necessary if money is worth 15% annually
Ans: Php 3,919.53

8. Find the difference between the sums of annuity due and ordinary annuity
for the following data Periodic payment = P14,000
Term = 16 years
Interest rate = 10% compounded quarterly
Ans: Php 53,991.62

9. During the first 10 years of the life of a certain machine the following
were spent for its maintenance:
During the first 5 years, Php 3,000.00 was spent each year; during the second
5 years, Php 5,000.00 each year was spent. In addition, Php 8,000.00 for
hauling at the end of fourth year, and Php 10,000.00 also for overhauling at
the end of the ninth year.
If the money is worth 9% compounded annually, what was the equivalent uniform
annual cost for the ten-year period?
Ans: Php 5,388.36

10. A company set aside Php 200,000.00 at the end of each year for plant
expansion. If the fund draws 8% compounded annually, how long will it take
before Php 2,500,000 can be saved?
Ans: 9 years

GOOD LUCK!

Prepared by:
ENGR. MARK JOREN M. CRISOLOGO