Past Board Exam Problems 7. CE Board Exam November 1996 13.

EE Board Exam October 1997

in Engineering Economy If P 500,000 is deposited at a rate of A man borrowed P 100,000 at the
11.25% compounded monthly, interest rate of 12% per annum,
SIMPLE AND COMPOUND INTEREST determine the compounded interest compounded quarterly. What is the
1. CE Board Exam May 1995 after 7 years and 9 months. effective rate?
How long will it take money to A. P 660,592 A. 13%
quadruple if it earns 7% compounded B. P 670,258 B. 13.2%
semi-annually? C. P 680,686 C. 12%
A. 20.15 years D. P 690,849 D. 12.5%
B. 26.30 years
C. 33.15 years 8. CE Board Exam May 1996 14. EE Board Exam October 1993
D. 40.30 years Two hundred thousand pesos was A bank pays 1% interest on savings
deposited on January 1, 1988 at an accounts four times a year. The
2. CE Board Exam November 1999 interest rate of 24% compounded effective annual interest rate is
Which of the following has the least semi-annually. How much would the A. 4.06%
effective annual interest rate? sum be on January 1, 1993? B. 1.00%
A. 12.5% compounded quarterly A. P 401,170 C. 2.04%
B. 11.5% compounded monthly B. P 421,170 D. 3.36%
C. 11.7% compounded semi- C. P 521,170
annually D. P 621,170 15. EE Board Exam June 1990
D. 12.2% compounded annually On his 6th birthday a boy is left an
9. CE Board Exam May 1999 inheritance. The inheritance will be
3. CE Board Exam November 1998 The tag price of a certain commodity paid in a lump sum of P 10,000 on his
One hundred thousand pesos was is for 100 days. If paid in 31 days, 21st birthday. What is the present
placed in a time deposit that earns there is a 3% discount. What is the value of the inheritance as of the
9% compounded quarterly, tax free. simple interest paid? boy’s 6th birthday, if the interest is
After how many years would it be A. 12.15% compounded annually? Assume i =
able to earn a total interest of fifty B. 6.25% 4%.
thousand pesos? C. 22.32% A. P 6,500
A. 4.56 D. 16.14% B. P 8,600
B. 4.47 C. P 5,500
C. 4.32 10. CE Board Exam May 1996, D. P 7,500
D. 4.63 November 1996
If P 500,000 was deposited at a rate 16. EE Board Exam October 1997, ME
4. CE Board Exam May 1998 of 11.25% compounded monthly, Board Exam October 1995
What rate (%) compounded quarterly determine the compounded interest Mandarin Bank advertises 9.5%
is equivalent to 6% compounded after 7 years and 9 months. account that yields 9.84% annually.
semi-annually? A. P 660,550 Find how often the interest is
A. 5.93 B. P 670,650 compounded.
B. 5.99 C. P 680,750 A. Daily
C. 5.96 D. P 690,850 B. Monthly
D. 5.90 C. Bi-monthly
11. CE Board Exam November 1994 D. Quarterly
5. CE Board Exam November 2000 P 500,000 was deposited 20.15
P 1,000,000 was invested to an years ago at an interest rate of 7& 17. EE Board Exam September 2010
account earning 8% compounded compounded semi-annually. How Determine the ordinary simple
continuously. What is the amount much is the sum now? interest on P 700 for 8 months and 15
after 20 years? A. P 2,000,000 days if the rate of interest is 15%?
A. P 4,452,796.32 B. P 2,000,150 A. P 84.50
B. P 4,953,032.42 C. P 2,000,300 B. P 90.76
C. P 5,365,147.25 D. P 2,000,500 C. P 74.38
D. P 3,456,254.14 D. P 81.56
12. CE Board Exam May 1997
6. CE Board Exam May 2000 A time deposit of P 110,000 was 18. EE Board Exam September 2010
How long will take it for money to made for 31 days. The net interest Determine the exact simple interest
quadruple itself if invested at 20% after deducting 20% withholding tax on P 500 for the period from January
compounded quarterly? is P 890.36. Find the rate of return 10 to October 28, 2009 at 16%
A. 10.7 years annually. interest.
B. 6.3 years A. 11.95% A. P 63.83
C. 9.5 years B. 12.75% B. P 54.23
D. 7.1 years C. 11.75% C. P 95.34
D. 12.25% D. P 48.61
19. ECE Board Exam November 1998 D. P 30,546.01 trust fund by her guardian until it
What will be the future worth of amounts to P 45,000. When will the
money after 12 months, if the sum of 26. ECE Board Exam April 1999, girl receive the money if the trust fund
P 25,000 is invested today at simple November 2000 is invested at 8% compounded
interest rate of 1% per month? The amount of P 50,000 was quarterly?
A. P 30,000 deposited in the bank earning at A. 7.42 years
B. P 29,000 interest of 7.5% per annum. B. 7.25 years
C. P 28,000 Determine the total amount at the C. 7 years
D. P 27,859 end of 5 years, if the principal and D. 6.8 years
interest were not withdrawn during
20. ECE Board Exam November 1998, the period? 32. ECE Board Exam April 1995
April 2001 A. P 71,781.47 A man expects to receive P 20,000 in
The effective rate of 14% B. P 72,475.23 10 years. How much is that money
compounded semi-annually is C. P 70,374.90 worth now considering interest at 6%
A. 14.49% D. P 78,536.34 compounded quarterly?
B. 12.36% A. P 11,025.25
C. 14.94% 27. ECE Board Exam November 1998 B. P 17,567.95
D. 14.88% At an interest rate of 10% C. P 15,678.45
compounded annually, how much will D. P 12,698.65
21. ECE Board Exam November 1996 a deposit of P 1,500 be in 15 years?
The amount of P 2,825.00 in 8 years A. P 6,100.00 33. ECE Board Exam, March 1996
at 5% compounded continuously is B. P 6,234.09 What is the effective rate
A. P 4,166.77 C. P 6,265.87 corresponding to 16% compounded
B. P 4,188.56 D. P 6,437.90 daily? Take 1 year = 360 days.
C. P 4,397.86 A. 16.5%
D. P 4,203.97 28. ECE Board April 1999 B. 16.78%
In how many years is required for P C. 17.35%
22. ECE Board Exam April 1999, 2,000 to increase by P 3,000 if D. 17.84%
November 1999 interest is at 12% compounded semi-
If you borrowed money from your annually? 34. ECE Board Exam November 1999,
friend with simple interest of 12%, A. 8 April 2003
find the present worth of P 50,000, B. 9 Mr. J. Reyes borrowed money from a
which is due at the end of 7 months. C. 10 bank. He received from the bank P
A. P 46,200 D. 7 1,842 and promised to repay P 2,000
B. P 44,893 at the end of 10 months. Determine
C. P 46,730 29. ECE Board Exam November 1998 the rate of simple interest.
D. P 45,789 A man expects to receive P 25,000 in A. 19.45%
8 years. How much is that money B. 15.70%
23. ECE Board Exam April 1999 worth now considering interest at 8% C. 16.10%
What is the corresponding effective compounded quarterly? D. 10.29%
rate of 18% compounded semi- A. P 13,859.12
quarterly? B. P 13,958.33 35. ECE Board Exam April 2000
A. 19.25% C. P 13,675.23 What is the effective rate
B. 19.48% D. P 13,265.83 corresponding to 18% compounded
C. 18.46% daily? Take one year is equal to 360
D. 18.95% 30. ECE Board Exam April 1998, days.
November 1995 A. 18.35%
24. ECE Board Exam April 1998 By the condition of a will, the sum of B. 19.72%
The amount of P 12,800 in 4 years at P 20,000 is left to a girl to be held in C. 18.61%
5% compounded quarterly is trust fund by her guardian until it D. 19.39%
A. P 14,785.34 amounts to P 50,000. When will the
B. P 15,614.59 girl receive the money if the fund is 36. ECE Board Exam November 2000
C. P 16,311.26 invested at 8% compounded Find the present worth of a future
D. P 15,847.33 quarterly? payment of P 80,000 to be made in
A. 7.98 years six years with an interest of 12%
25. ECE Board Exam April 1999 B. 10.34 years compounded annually.
Find the present worth of a future C. 11.57 years A. P 40,530.48
payment of P 100,000 to be made in D. 10.45 years B. P 45,222.45
10 years with an interest of 12% C. P 42,356.76
compounded quarterly. 31. ECE Board Exam November 1995, D. P 41,246.50
A. P 30,444.44 November 1998
B. P 33,000.00 By the conditions of a will, the sum of
C. P 30,655.68 P 25,000 is left to a girl to be held in a
37. ECE Board Exam April 2001 A. P 9,321 C. 14.36%
The amount of P 20,000 was B. P 9,221 D. 12.00%
deposited in a bank earning an C. P 9,248
interest of 6.5% per annum. D. P 9,500 48. ECE Board Exam November 1997
Determine the total amount at the Fifteen (15%) when compounded
end of 7 years if the principal and 43. ECE Board Exam November 2001 semi-annually will have an effective
interest were not withdrawn during In how many years will the amount of rate of
this period. P 10,000 triple if invested at an A. 15.93%
A. P 29,500 interest rate of 10% compounded per B. 18.78%
B. P 31,080 year? C. 16.02%
C. P 30,550 A. 6 D. 15.56%
D. P 35,510 B. 5
C. 7 49. ECE Board Exam November 2002
38. ECE Board Exam April 2001 D. 8 In how many years will P 1,000
A loan of P 50,000 is to be paid in 3 double if interest is 10%
years at the amount of P 65,000. 44. ECE Board Exam November 2002 compounded per year?
What is the effective rate of money? The parents planned for their son to A. 9
A. 10% receive P 50,000 ten years from now. B. 6
B. 15% What amount in pesos should they C. 8
C. 13% invest now if it will earn interest of D. 7
D. 12% 12% compounded annually for the
first five years and 15% compounded 50. ECE Board Exam November 2002
39. ECE Board Exam April 2001 quarterly during the next five years? In how many years will it take money
If P 1,000 accumulates to P 1,500 A. P 12,750.66 to quadruple if invested at 8%
when invested at a simple interest for B. P 15,000.00 compounded semi-annually?
three years, what is the rate of C. P 14,476.70 A. 18.55
interest? D. P 13,586.82 B. 19.67
A. 16.67% C. 15.12
B. 16.33% 45. ECE Board Exam November 2001, D. 17.70
C. 13.36% April 2004
D. 13.33% A customer buys an electric fan from 51. ECE Board Exam April 2005
a store that charges P 1,500 at the A man deposited P 5,000 on the date
40. ECE Board Exam November 2001 end of 90 days. The customer wishes his son celebrated his 1st birthday. If
Today an investor withdraws P to pay cash. What is the cash price if the money is worth 10%
50,000 representing the accrued the money is worth 10% simple compounded semi-annually, what is
amount of his investment that interest? the maximum amount the son can
matured. If he invested at 10% A. P 1,615.45 withdraw on his 21st birthday?
compounded semi-annually for 10 B. P 1,463.41 A. P 35,500
years, how much did he invest? C. P 1,510.50 B. P 35,800
A. P 18,844.00 D. P 1,750.30 C. P 35,200
B. P 21,500.00 D. P 36,750
C. P 20,000.00 46. ECE Board Exam November 1996
D. P 17,800.00 Find the nominal rate that if 52. ECE Board Exam April 2005
converted quarterly could be used What will be the value of P 6,000 four
41. ECE Board Exam November 2001 instead for 15% compounded semi- and one-half years from now if
A man invested part of P 20,000 at annually? invested at 15% compounded
18% and the rest at 16%. The annual A. 14.93% quarterly?
income from 16% investment was P B. 14.72% A. P 10,052
620 less than three times the annual C. 15.56% B. P 11,640
income from 18% investment. How D. 15.90% C. P 11,218
much did he invest at 18%? D. P 10,813
A. P 5,546.45 47. ECE Board Exam April 2003
B. P 5,231.15 A man borrows P 15,000 from Hong 53. ECE Board Exam November 1997
C. P 5,343.12 Kong Bank. The rate of simple What rate of interest compounded
D. P 5,457.14 interest is 12%, but the interest is to annually is the same as the rate of
be deducted from the loan at the time interest of 8% compounded
42. ECE Board Exam November 1997, the money is borrowed. At the end of quarterly?
November 2001 one year he has to pay back P A. 8.24%
What is the accumulated amount 15,000. What is the actual rate of B. 8.42%
after three years of P 6,500 invested interest? C. 6.88%
at the rate of 12% per year A. 13.46% D. 7.90%
compounded semi-annually? B. 13.64%
54. ECE Board Exam November 1997 interest of 8% compounded
What interest rate, compounded quarterly?
monthly is equivalent to 10% A. 6.48%
effective rate? B. 8.42%
A. 9.75% C. 8.24%
B. 9.50% D. 6.88%
C. 9.68%
D. 9.57% 61. ECE Board Exam November 1998
A loan of P 5,000 is made for a
55. ECE Board Exam November 1997 period of 15 months at a simple
How long will it take money to triple interest rate of 15%. What future
itself if invested at 10% compounded amount is due at the end of a loan
semi-annually? period?
A. 13.3 years A. P 5,637.50
B. 11.3 years B. P 5,900.90
C. 11.9 years C. P 5,937.50
D. 12.5 years D. P 5,842.54
56. ECE Board Exam November 1997 62. ME Board Exam April 1995
A man wishes his son to receive P If P 4,000 is borrowed for 75 days at
500,000.00 ten years from now. What 16% per annum simple interest, how
amount should he invest now if it will much will be due at the end of 75
earn interest of 12% compounded days?
annually during the first 5 years and A. P 4,133.33
15% compounded quarterly during B. P 4,333.33
the next 5 years? C. P 4,166.67
A. P 135,868.19 D. P 4,150.00
B. P 134,678.90
C. P 123,433.23 63. ME Board Exam April 1993
D. P 145,345.34 Agnes Abanilla was granted a loan of
P 20,000 by her employee CPM
57. ECE Board Exam November 1998 Industrial Fabricator and Construction
At an interest rate 10% compounded Corporation with an interest of 6% for
annually, how much will a deposit of 180 days on the principal collected in
P 1,500 amount in 15 years? advance. The corporation would
A. P 6,100.00 accept a promissory note for P
B. P 6,234.09 20,000 non-interest for 180 days. If
C. P 6,265.87 discounted once, find the proceeds of
D. P 6,437.90 the note.
A. P 18,600
58. ECE Board Exam November 1999 B. P 18,800
Find the nominal rate which if C. P 19,000
converted quarterly could be used D. P 19,200
instead of 12% compounded semi-
annually? 64. ME Board Exam April 1998
A. 14.02% A bank charges 12% simple interest
B. 21.34% on a P 300.00 loan. How much will be
C. 11.29% repaid if the loan is paid back in one
D. 11.83% lump sum after three years?
A. P 408.00
59. ECE Board Exam November 1999, B. P 415.00
April 2003 C. P 551.00
What nominal, compounded semi- D. P 450.00
annually, yields the same amount as
16% compounded quarterly? 65. ME Board Exam April 1998
A. 16.64% It is the practice of almost all banks in
B. 16.18% the Philippines that when they grant a
C. 16.32% loan, the interest for one year is
D. 16.00% automatically deducted from the
principal amount upon release of
60. ECE Board Exam November 1999 money to a borrower. Let us therefore
What rate of interest compounded assume that you applied for a loan
annually is the same as the rate of with a bank and the P 80,000 was
approved at an interest rate of 14% of
which P 11,200 was deducted and
you were given a check of P 68,800.
Since you have to pay the amount of
P 80,000 one year after, what then
will be the effective interest rate?
A. 15.90%
B. 16.28%
C. 16.30%
D. 16.20%
66. ME Board Exam October 1998
An interest rate is quoted as being
7.5% compounded quarterly. What is
the effective annual interest rate?
A. 7.71%
B. 7.22%
C. 15.75%
D. 21.81%
67. ME Board April 1993
Alexander Michael owes P 25,000
due in 1 year and P 75,000 due in 4
years. He agrees to pay P 50,000
today and the balance in 2 years.
How much must he pay at the end of
two years if money is worth 5%
compounded semi-annually?
A. P 38,025.28
B. P 35,021.25
C. P 30,500.25
D. P 39,021.28
68. ME Board April 1996
Consider a deposit of P 600 to be
paid in one year by 700. What are the
conditions on the rate of interest, i%
per year compounded annually such
that the net present worth of the
investment is positive. Assume i ≥ 0.
A. 0 ≤ i ≤ 14.3%
B. 0 ≤ i ≤ 16.7%
C. 12.5% ≤ i ≤ 14.3%
D. 16.7% ≤ i ≤ 100%
69. ME Board Exam October 1995
A company invests P 10,000 today to
be repaid in 5 years in one lump sum
at 12% compounded annually. How
much profit in present day pesos is
realized?
A. P 7,623
B. P 7,236
C. P 7,326
D. P 7,362
70. ME Board Exam April 1996
A firm borrows P 2,000 for 6 years at
8%. At the end of 6 years, it renews
the loan for the amount plus P 2,000
more for 2 years at 8%. What is the
lump sum due?
A. P 5,355
 B. P 5,892 76. ME Board Exam April 1998 81. ME Board Exam October 1997
C. P 6,035 A merchant puts in his P 2,000 to a If the interest rate on an account is
D. P 6,135 small business for a period of six 11.5% compounded yearly, how
years. With a given interest rate on many years will it take to triple the
71. ME Board Exam October 1996 the investment of 15% per year, amount?
A deposit of P 1,000 is made in a compounded annually, how much will A. 11 years
bank account that pays 8% interest he collect at the end of the 6th year? B. 10.09 years
compounded annually, how much A. P 4,400 C. 9 years
money will be in the account after 10 B. P 4,390 D. 12 years
years? C. P 4,200
A. P 1,925 D. P 4,626 82. ME Board Exam October 1997
B. P 1,860 How much must be invested on
C. P 2,345 77. ME Board Exam October 1995 January 1, year 1, in order to
D. P 2,160 In year zero, you invest P 10,000 in a accumulate P 2,000 on January 1,
15% security for 5 years. During that year 6 at 6%.
72. ME Board Exam October 1996 time, the average inflation rate is 6%. A. P 1,295.00
Fifteen years ago, P 1,000 was How much, in terms, zero pesos will B. P 1,695.00
deposited in a bank account, and be in the account at maturity? C. P 1,495.00
today it is worth P 2,370. The bank A. P 12,020 D. P 1,595.00
pays interest semi-annually. What B. P 13,030
was the interest rate paid in this C. P 14,040 83. ME Board Exam October 1997
account? D. P 15,030 A savings association pays 4%
A. 3.8% interest quarterly. What is the
B. 4.9% 78. ME Board Exam October 1996 effective annual interest rate?
C. 5.0% You borrow P 3,500 for one year from A. 18.045%
D. 5.8% a friend at an interest rate of 1.5% B. 17.155%
per month instead of taking a loan C. 16.985%
73. ME Board Exam April 1998 from a bank at a rate of 18% per D. 17.230%
If P 5,000 shall accumulate for 10 year. Compare how much money you
years at 8% compounded quarterly, will save or lose from the transaction. 84. ME Board Exam October 1997
find the compounded interest at the A. You will pay P 155 more if you A bank offers 1.2% effective monthly
end of 10 years. borrowed from the bank interest. What is the effective annual
A. P 6,005.30 B. You will save P 55 by borrowing rate with monthly compounding?
B. P 6,000.00 from your friend A. 15.4%
C. P 6,040.20 C. You will pay P 85 more if you B. 8.9%
D. P 6,010.20 borrowed from the bank C. 14.4%
D. You will pay P 55 less if you D. 7.9%
74. ME Board Exam April 1998 borrowed from the bank
A sum of P 1,000 is invested now and 85. ME Board Exam October 1997
left for eight years, at which time the 79. ME Board Exam April 1996 What is the present worth of P 27,000
principal is withdrawn. The interest What is the present worth of two P due in 6 years if money is worth 13%
has accrued is left for another eight 100 payments at the end of the third and is compounded semi-annually?
years. If the effective annual interest year and fourth year? The annual A. P 12,681.00
rate is 5%, what will be the interest rate is 8%. B. P 13,500.00
withdrawal amount at the end of the A. P 153 C. P 15,250.00
16th year? B. P 160 D. P 21,931.00
A. P 706 C. P 162
B. P 500 D. P 127 86. ME Board Exam October 1997
C. P 774 A student deposits P 1,500 in a 9%
D. P 799 80. ME Board Exam October 1997 account today. He intends to deposit
A student has money given by his another P 3,000 at the end of two
75. ME Board Exam April 1998 grandfather in the amount of P years. He plans to purchase in five
The amount of P 1,500 was 20,000. How much money in the form years his favourite shoes worth P
deposited in a bank account, 20 of interest will he get if the money is 5,000. Calculate the money that will
years ago. Today it is worth P 3,000. put in a bank that offers 8% rate be left in his account one year after
Interest is paid semi-annually. compounded annually, at the end of the purchase.
Determine the interest rate paid on 7 years? A. P 1,280.00
his account. A. P 34,276.48 B. P 1,250.00
A. 3% B. P 34,270.00 C. P 1,300.00
B. 2.9% C. P 36,276.40 D. P 1,260.00
C. 3.5% D. P 34,266.68
D. 4%
87. ME Board Exam April 1998 B. 8.3 years B. 14%
If the nominal rate of interest rate is C. 9 years C. 10%
3%, how much is P 5,000 worth in 10 D. 10.2 years D. 19%
years in a continuously compounded
amount? 94. ME Board Exam October 2000 100. ECE Board Exam November 1998
A. P 5,750.00 A savings association pays 1.5% You loan from a loan firm an amount
B. P 7,500.00 interest quarterly. What is the of P 100,000 with the rate of simple
C. P 6,750.00 effective annual interest rate? interest of 20%, but interest was
D. P 6,350.00 A. 6.14% deducted from the loan at the time
B. 8.54% the money was borrowed. If at the
88. ME Board Exam October 1995 C. 7.32% end of one year, you have to pay the
A bank advertising 9.5% accounts D. 6.45% full amount of P100,000, what is the
that yield 9.84% annually. How often actual rate of interest?
is the interest compounded? 95. ME Board Exam October 2000 A. 25.0%
A. daily A bank offers 0.5% effective monthly B. 27.5%
B. monthly interest. What is the effective annual C. 30.0%
C. bi-monthly rate with monthly compounding? D. 18.8%
D. quarterly A. 6.2%
B. 6% ANNUITY
89. ME Board Exam October 2000 C. 7.2% 101. CE Board Exam May 2000
If you borrow money from your friend D. 7% Five thousand pesos is deposited at
with simple interest of 12%, find the the end of each year for 15 years into
present worth of P 20,000, which is 96. ME Board Exam October 2000 an account earning 7.5%
due at the end of 9 months What nominal rate converted compounded continuously. Find the
A. P 18,688.20 quarterly could be used instead of amount after 15 years.
B. P 18,691.50 12% compounded semi-annually? A. P 133,541.30
C. P 18,518.50 A. 10.72% B. P 152,754.20
D. P 18,348.60 B. 11.43% C. P 148,365.90
C. 11.82% D. P 112,854.10
90. ME Board Exam October 2000 D. 11.97%
A businessman needs to have P 102. CE Board Exam November 1996
100,000 in five years. How much 97. ME Board Exam October 2000 A man inherited a regular endowment
money must he put into his 10% A sum of money was deposited now of P 100,000 every end of 3 months
account in the bank now? in a savings account. The effective for 10 years. However, he may
A. P 72,085.60 annual interest rate is 12%. How choose to get a single lump sum
B. P 62,092.10 much money must be deposited to payment at the end of 4 years. How
C. P 70,654.10 yield P 500 at the end of 11 months? much is the lump sum if the cost of
D. P 60,345.20 A. P 153.00 money is 14% compounded
B. P 144.00 quarterly?
91. ME Board Exam October 2000 C. P 446.00 A. P 3,802,862
What is the present worth of P 54,000 D. P 451.00 B. P 3,702,939
due in five years if money is worth C. P 3,502,546
11% compounded semi-annually? 98. ME Board Exam October 2000 D. P 3,602,431
A. P 30,367.12 What amount of money would have
B. P 28,654.11 to be invested to have P 40,000 at 103. CE Board Exam November 1995
C. P 31,613.25 the end of three years at a 10% Find the present value of perpetuity
D. P 34,984.32 compounded interest rate? of P 15,000 payable semi-annually if
A. P 30,052.59 money is worth 8%, compounded
92. ME Board Exam October 2000 B. P 28,456.79 quarterly.
The interest on an account is 13% C. P 32,871.12 A. P 327,537
compounded annually. How many D. P 34,908.33 B. P 374,977
years approximately will it take to C. P 373,767
triple the amount? BANKER’S DISCOUNT D. P 371,287
A. 8 years 99. EE Board Exam April 1996
B. 8.5 years A man borrowed P 20,000.00 from a 104. CE Board Exam May 1998
C. 9.5 years local commercial bank which has a A man loans P 187,400 from a bank
D. 9 years simple interest of 16% but the with interest at 5% compounded
interest is to be deducted from the annually. He agrees to pay his
93. ME Board Exam October 2000 loan at the time that the money was obligations by paying 8 equal
When will an investment of P 4,000 borrowed and the loan is payable at payments, the first being due at the
double if the effective rate is 8% per the end of one year. How much is the end of 10 years. Find the annual
annum? actual rate of interest. payments.
A. 8.4 years A. 12% A. P 44,982.04
 B. P 56,143.03
C. P 62,334.62
D. P 38,236.04
105. CE Board Exam November 1996
A man paid 10% down-payment of P
200,000 for a house and lot and
agreed to pay the balance on
monthly instalments for “x” years at
an interest arte of 15% compounded
monthly. If the monthly instalment
was P 42,821.84, find the value of x.
A. 11
B. 9
C. 5
D. 7
106. CE Board Exam November 2000
A man made a year-end payment of
P 100,000 to an account earning 8%
annually for 10 years. How much is in
the account after 20 years?
A. P 3,127,540.18
B. P 4,075,458.99
C. P 3,327,452.36
D. P 3,247,111.25
107. CE Board Exam May 1996
A service car whose cash price was
P 540,000 was bought with a down-
payment of P 162,000 and monthly
amortization of P 10,874.29 for 5
years. What was the rate of interest if
compounded monthly?
A. 20%
B. 26%
C. 24%
D. 22%
108. CE Board Exam May 1998
The present value of an annuity of R
pesos, payable annually for 8 years,
with the first payment at the end of 10
years, is P 187,481.25. Find the
value of R if money is worth 5%.
A. P 45,000
B. P 44,000
C. P 42,000
D. P 43,000
109. CE Board Exam May 1999, May
1995
A man paid 10% down-payment of P
200,000 for a house and lot and
agreed to pay the balance on
monthly instalments for 60 months at
an interest rate of 15% compounded
monthly. Determine the required
monthly payment.
A. P 40,282.00
B. P 42,822.00
C. P 58,477.00
D. P 5,848.00
110. CE Board Exam November 1998
A debt of x pesos, with interest rate of
7% compounded annually will be
retired at the end of 10 years through
the accumulation of deposit in the
sinking fund invested at 6%
compounded semi-annually. The
deposit in the sinking fund every end
of six months is P 21,962.68. What is
the value of x?
A. P 300,000
B. P 250,000
C. P 350,000
D. P 400.000
111. EE Board Exam October 1999
A manufacturer desires to set aside a
certain sum of money to provide
funds to cover the yearly operating
expenses and the cost of replacing
every year the dyes of a stamping
machine used in making radio
chassis as model changes for a
period of 10 years.
Operating cost per year = P 500
Cost of dye = P 1,200
Salvage value of dye = P 600
The money will be deposited in a
savings account which earns 6%
interest. Determine the sum of money
that must be provided, including the
cost of the initial dye.
A. P 8,266.20
B. P 8,220.66
C. P 8,626.02
D. P 8,882.10
112. EE Board Exam October 1997
A young engineer borrowed P 10,000
at 12% interest and paid P 2,000 per
annum for the last 4 years. What
does he have to pay at the end of the
fifth year in order to pay of his loan?
A. P 6,918
B. P 5,674
C. P 6,074
D. P 3,296
113. EE Board Exam October 1999
A factory operator bought a diesel
generator set for P10,000 and agreed
to pay the dealer uniform sum at the
end of each year for 5 years at 8%
interest compounded annually, that
the final payment will cancel the debt
for principal and interest. What is the
annual payment?
A. P 2,504.57
B. P 2,780.56
C. P 2,389.17
D. P 2,129.00
114. EE Board Exam April 1997
Mr. Cruz plans to deposit for the
education of his 5 year old son, P 500
at the end of each month for 10 years
at 12% annual interest compounded
monthly. The amount that will be
available in two years is
A. P 13,000
B. P 14,500
C. P 13,500
D. P 14,000
115. EE Board Exam October 1997
A man purchased on monthly
instalment a P 100,000 worth of land.
The interest rate is 12% nominal and
payable in 20 years. What is the
monthly amortization rate?
A. P 1,101.08
B. P 1,121.01
C. P 1,152.15
D. P 1,128.12
116. ECE Board Exam November 1998,
November 1999, April 2001
What is the accumulated amount of a
five year annuity paying P 6,000 at
the end of year, with interest at 15%
compounded annually?
A. P 40,454.29
B. P 41,114.29
C. P 41,454.29
D. P 40,544.29
117. ECE Board Exam November 1996
If money is worth 8%, determine the
present value of a perpetuity of P
1,000 payable annually, with the first
payment due at the end of 5 years.
A. P 9,187.87
B. P 9,178.87
C. P 9,272.64
D. P 9,272.46
118. ECE Board Exam November 1998,
ME Board Exam April 1998
How much must be deposited at 6%
each year beginning on January 1,
year 1, in order to accumulate P
5,000 on the date of the last deposit,
January 1, year 6?
A. P 751.00
B. P 717.00
C. P 715.00
D. P 725.00
119. ECE Board Exam November 1995
An employee obtained a loan of P
10,000 at the rate of 6% compounded
annually in order tom repair a house.
How much must he pay monthly to
amortize the loan within a period of
10 years?
 A. P 110.22 125. ECE Board Exam November 2003, investment if the rate of interest is
B. P 112.22 November 2000 12% compounded semi-annually?
C. P 111.22 What annuity is required over 12 A. P 134,666.80
D. P 109.22 years to equate with a future amount B. P 143,999.08
of P 20,000. Assume i = 6% annually. C. P 154,696.80
120. ECE Board Exam April 1998, A. P 1,185.54 D. P 164,969.80
November 2000 B. P 1,305.20
How much money must you invest C. P 1,210.62 131. ME Board Exam October 1996
today in order to withdraw P 2,000 D. P 1,135.52 You need P 4,000 per year for four
annually for 10 years if the interest years to go to college. Your father
rate is 9%? 126. ECE Board Exam April 2001, April invested P 5,000 in 7% account for
A. P 12,853.32 2003 your education when you were born.
B. P 12,881.37 Today a businessman borrowed If you withdraw P 4,000 at the end of
C. P 12,385.32 money to be paid in 10 equal your 17th, 18th, 19th and 20th birthday,
D. P 12,835.32 payments for 10 quarters. If the how much will be left on the account
interest rate is 10% compounded at the end of the 21st year?
121. ECE Board Exam April 1998 quarterly and the quarterly payment is A. P 1,700
Money borrowed today is to be paid 2,000 pesos, how much did he B. P 2,500
in 6 equal payments at the end of 6 borrow? C. P 3,400
quarters. If the interest is 12% A. P 19,700.00 D. P 4,000
compounded quarterly. How much B. P 18,795.00
was initially borrowed if quarterly C. P 20,500.00 132. ME Board Exam October 1996
payment is P 2,000? D. P 17,500.00 Mr. Ayala borrows P 100,000 at 10%
A. P 10,834.38 effective annual interest. He must
B. P 10.382.90 127. ECE Board Exam April 2001 pay back the loan over 30 years with
C. P 10,586.90 What is the present worth of a P 500 uniform monthly payments due on
D. P 10,200.56 annuity starting at the end of the third the first day of each month. How
year and continuing at the end of much does Mr. Ayala pay each
122. ECE Board Exam November 1998 fourth year, if the annual interest rate month?
A debt of P 10,000 with 10% interest is 10%? A. P 870
compounded semi-annually is to be A. P 717.16 B. P 846
amortized by semi-annual payment B. P 781.12 C. P 878
over the next 5 years. The first is due D. P 839
C. P 771.16
in 6 months. Determine the semi-
D. P 777.16
annual payment. 133. ME Board Exam April 1998
A. P 1,200 A house and lot can be acquired by a
128. ECE Board Exam November 2002
B. P 1,295 down-payment of P 500,000 and a
What is the amount of an annuity of
C. P 1,193 yearly payment of P 100,000 at the
P 5,000 per year at the end of each
D. P 1,400 end of each year for a period of 10
year for 7 years at 5% interest
years, starting at the end of 5 years
compounded annually?
123. ECE Board Exam April 1998 from the date of purchase. If money
A. P 41,510
How much must you invest today in is worth 14% compounded annually,
B. P 40,710
order to withdraw P 2,000 annually what is the price of the property?
for 10 years if the interest rate is 9%? C. P 44,710 A. P 810,100
A. P 12,853.32 D. P 42,612 B. P 808,835
B. P 12,881.37 C. P 801,900
C. P 12,385.32 129. ECE Board Exam November 2003 D. P 805,902
D. P 12,835.32 A merchant loaned P 500,000
payable in 10 years at an interest 134. ME Board Exam October 1994
124. ECE Board Exam November 2000 rate of 12% compounded annually. If you obtain a loan of P 1,000,000 at
Find the annual payment to What is the monthly amortization for the rate of 12% compounded
extinguish a debt of P 10,000 10 years? annually in order to build a house,
payable for 6 years at 12% interest A. P 7,750 how much must you pay monthly to
annually. B. P 5,450 amortize the loan within a period of
A. P 2,282.24 C P 8,575 10 years?
B. P 1,342.46 D. P 6,996 A. P 13,994.17
C. P 2,432.26 B. P 12,955.21
D. P 1,824.52 130. ECE Board Exam April 1998 C. P 15,855.45
A person buys a piece of lot for P D. P 12,900.25
100,000 down-payment and 10
deferred semi-annual payments of P 135. ME Board Exam April 1998
8,000 each, starting three years from A piece of machinery can be bought
now. What is the present value of the for P 10,000 cash or for P 2,000
 down-payment and payments of P
750 per year for 15 years. What is the
annual interest rate for the time
payments?
A. 4.61%
B. 3.81%
C. 5.71%
D. 11%
136. ME Board Exam April 1998
A parent on the day the child is born
wishes to determine what lump sum
would have to be paid into an
account bearing interest at 5%
compounded annually, in order to
withdraw P 20,000 each on the
child’s 18th, 19th, 20th and 21st
birthdays. How much is the lump sum
amount?
A. P 35,941.73
B. P 33,941.73
C. P 30,941.73
D. P 25,941.73
137. ME Board Exam April 1998
An instructor plans to retire in exactly
one year and want an account that
will pay him P 25,000 a year for the
next 15 years. Assuming a 6%
annual effective interest rate, what is
the amount he would need to deposit
now? (The fund would be depleted
after 15 years).
A. P 240,000.00
B. P 242,806.00
C. P 248,500.00
D. P 250,400.00
138. ME Board Exam April 1998
A manufacturing firm wishes to give
each 80 employees a holiday bonus.
How much is needed to invest
monthly for a year at 12% nominal
interest rate compounded monthly,
so that each employee will receive a
P 2,000 bonus?
A. P 12,608
B. P 12,615
C. P 12,600
D. P 12,300
139. ME Board Exam October 2000
A sinking fund consists of 15 annual
deposits of P 1,000 each, with
interest earned at the rate of 4%
compounded annually. What is the
principal in the fund at its terminal
date?
A. P 25,115.00
B. P 20,023.59
C. P 29,546.37
D. P 28,105.00
140. ME Board Exam October 2000
A P 10,000 loan is to be paid off in 10
equal annual payments. The annual
interest rate is 15%. How much
interest will be paid in the first two
years?
A. P 2,926.12
B. P 2,970.11
C. P 2,195.87
D. P 2,950.62
141. ME Board Exam October 1995
How much money must you invest
today in order to withdraw P 1,000
per year for 10 years if interest rate is
12%?
A. P 5,650.00
B. P 6,550.00
C. P 5,560.00
D. P 7,550.00
142. ME Board Exam October 1996
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 153.44
B. P 152.89
C. P 154.99
D. P 156.33
143. ME Board Exam October 1995
If P 500 is invested at the end of year
for 6 years, at an effective annual
interest rate of 7%, what is the total
amount available upon the deposit of
the 6th payment?
A. P 3,455.00
B. P 3,544.00
C. P 3,577.00
D. P 3,688.00
144. ME Board Exam April 1996
In five years, P 18,000 will be needed
to pay for a building renovation. In
order to generate this sum, a sinking
fund consisting of three annual
payments is established now. For tax
purposes, no further payments will be
made after three years. What
payment is necessary if money is
worth 15% per annum?
A. P 3,345.65
B. P 3,789.34
C. P 3,919.53
D. P 3,878.56
145. ME Board Exam October 1997
A car was bought on instalment basis
with a monthly instalment of P 10,000
for 60 months. If interest is 12%
compounded annually, calculate the
cash price of the car.
A. P 455,875.00
B. P 567,539.75
C. P 678,519.75
D. P 345,539.75
146. ME Board Exam October 1997
A steel mill estimates that one of its
furnaces will require maintenance of
P 20,000 at the end of 2 years, P
40,000 at the end of 4 years and P
80,000 at the end of 8 years. What
uniform semi-annual amounts could it
set aside over the next eight years at
the end of each period to meet these
requirements of maintenance cost if
all the funds would earn interest at
the rate of 6% compounded semi-
annually?
A. P 7,897.35
B. P 9,397.35
C. P 8,897.35
D. P 6,897.35
DEPRECIATION
147. CE Board Exam November 1997
The cost of equipment is P 500,000
and the cost of installation is P
30,000. If the salvage value is 10% of
the cost of equipment at the end of 5
years, determine the book value at
the end of fourth year. Use straight
line method.
A. P 155,000
B. P 140,000
C. P 146,000
D. P 132,600
148. CE Board Exam May 2000
A machine costing P 480,000 has a
life expectancy of 12 years with a
salvage value of 10% of the first cost.
What is the book value after five
years using declining balance
method?
A. P 183,892
B. P 152,758
C. P 196,432
D. P 214,785
149. CE Board Exam May 2000
A certain copier machine costs P
150,000 with a trade-in value of P
15,000 making 800,000 copies.
Using the declining balance method,
what is the book value when the
machine had made 300,000 copies?
A. P 68,111
B. P 64,896
C. P 62,531
D. P 63,254
150. CE Board Exam November 1995
A machine costing P 720,000 is
estimated to have a book value of P
40,545.73 when retired at the end of
10 years. Depreciation cost is
computed using a constant
percentage of the declining book
value. What is the annual rate of
depreciation in percentage?
A. 28
B. 25
C. 16
D. 30
151. CE Board Exam May 1996
A machine costing P 45,000 is
estimated to have a book value of P
4,350 when retired at the end of 6
years. Depreciation cost is computed
using a constant of the declining
book value. What is the annual rate
of depreciation in percentage?
A. 33.25%
B. 32.25%
C. 35.25%
D. 34.25%
152. CE Board Exam November 1997,
November 1994
An engineer bought an equipment for
P 500,000. Other expenses including
installation amounted to P 30,000. At
the end of its estimated useful life of
10 years, the salvage value will be
10% of its first cost. Using straight
line method of depreciation, what is
its book value after 5?
A. P 281,500.00
B. P 291,500.00
C. P 301,500.00
D. P 271,500.00
153. CE Board Exam November 1997
A machine having first cost of P
60,000 will be retired at the end of 8
years. Depreciation cost is computed
using a constant percentage of the
declining book value. What is the
total cost of depreciation up to the
time the machine is retired if the
annual rate of depreciation is
28.72%?
A. P 56,000
B. P 57,000
C. P 58,000
D. P 59,000
154. EE Board Exam April 1997
A machine has an initial cost of P
50,000 and a salvage value of P
10,000 after 10 years. Find the book
value after 5 years using straight line
method.
A. P 30,000
B. P 28,000
C. P 32,000
D. P 26,000
155. ECE Board Exam November 1997,
November 1999
A machine costs P 8,000.00 and an
estimated life of 10 years with a
salvage value of P 500.00. What is its
book value after 8 years using
straight line method?
A. P 2,500.00
B. P 4,000.00
C. P 3,000.00
D. P 2,000.00
156. ECE Board Exam November 1998
ABC Corporation makes it a policy
that for any new equipment
purchased, the annual depreciation
cost should not exceed 20% of the
first cost at any time with no salvage
value. Determine the length of
service life in years necessary if the
depreciation used is the SYD
method.
A. 9 years
B. 10 years
C. 12 years
D. 19 years
157. ECE Board Exam November 2002
What is the book value of an
equipment purchased three years
ago for P 15,000 if it is depreciated
using the sum of the years digit
method? The expected life is 5
years.
A. P 4,000
B. P 3,000
C. P 3,050
D. P 5,000
158. ECE Board Exam November 2003
A brand new machine is estimated to
have a salvage value of P 10,000
after ten years and a book value of P
30,000 after 5 years, what is the
initial cost of the machine? (Assume
straight line depreciation).
A. P 50,000
B. P 65,000
C. P 60,000
D. P 55,000
159. ECE Board Exam November 2003
A machine was brought for P 50,000
with an estimated useful life of 10
years and a salvage value of P 5,000.
What is its annual depreciation
assuming straight line trend?
A. P 3,500
B. P 4,500
C. P 5,000
D. P 6,500
160. ECE Board Exam November 2003
Ten years ago a businessman
purchased a machine for P 50,000
with an expected life of 20 years
based on straight line depreciation.
Today, he decided to replace it with a
modern one that costs P 120,000. If
the salvage value of the old unit is P
20,000, how much more will he raise
to buy the new machine?
A. P 75,000
B. P 90,000
C. P 45,000
D. P 55,000
161. ECE Board Exam April 2004
A heavy duty copying machine was
procured for P 100,000 with an
estimated salvage value of P 10,000
after 10 years. What is the book
value after 5 years? (Assume
straight line depreciation).
A. P 55,000
B. P 90,000
C. P 60,000
D. P 45,000
162. ECE Board Exam April 2004
Based on its purchased price a
machine is expected to depreciate at
a uniform rate of 18 percent annually
until it has zero salvage value.
Approximate the useful life of the
machine using the SYD method?
A. 9 years
B. 10 years
C. 11 years
D. 12 years
163. ECE Board Exam April 1998, April
1999
A telephone company purchased a
microwave radio equipment for P 6
million. Freight and installation
charges amounted to 4% of the
purchased price. If the equipment will
be depreciated over a period of 10
years with a salvage value of 8%,
determine the depreciated cost
during the 5th year using SYD.
A. P 626,269.10
B. P 622,708.07
C. P 638,272.08
D. P 627,987.06
164. ECE Board Exam November 1999,
April 2000
A VOM has a current selling price of
P 400. If its selling price is expected
 to decline at a rate of 10% per annum
due to obsolescence, what will be its
selling price after 5 years? Use
Matheson’s formula.
A. P 213.10
B. P 249.50
C. P 236.20
D. P 200.00
165. ECE Board Exam April 2001
A copying machine has a useful life
of 3 years and a salvage value of P
20,000 was bought for P 135,000. If
the owner decides to sell after using
it for 2 years, how much should the
selling price be so that he will not
lose or gain if the interest is 5%.
(Hint: apply the Sinking Fund
method)
A. P 90,000
B. P 74,750
C. P 60,220
D. P 80,000
166. ME Board Exam April 1992
A unit of welding machine cost P
45,000 with an estimated life of 5
years. Its salvage value is P 2,500.
Find its depreciation rate by straight
line method.
A. 17.75%
B. 19.88%
C. 18.89%
D. 15.56%
167. ME Board Exam October 1992
The initial cost of a paint sand mill,
including the installation, is P
800,000. The BIR approved life of
this machine is 10 years for
depreciation. The estimate salvage
value of the mill is P 50,000 and the
cost of dismantling is estimated to be
P 15,000. Using straight line method,
what is the annual depreciation
charge and what is the book value of
the machine at the end of six years?
A. P 74,500 and P 340,250
B. P 76,500 and P 341,000
C. P 76,500 and P 342,500
D. P 77,500 and P 343,250
168. ME Board Exam April 1998
A company purchased an asset for P
10,000 and plans to keep it for 20
years. The salvage value is zero at
the end of 20th year, what is the
depreciation in the third year? Use
SYD method.
A. P 1,000
B. P 857
C. P 937
D. P 747
169. ME Board Exam April 1998
An asset is purchased for P
9,000.00. It estimated life is 10 years
after which it will be sold for P
1,000.00. Find the book value during
the first year if sum-of-years’ digit
(SYD) depreciation method is used.
A. P 8,000
B. P 6,500
C. P 7,545
D. P 6,000
170. ME Board Exam April 1998
An asset is purchased for P
500,000.00. The salvage value in 25
years is P 100,000.00. What is the
total depreciation in the first three
years using straight line method?
A. P 48,000
B. P 24,000
C. P 32,000
D. P 16,000
171. ME Board Exam October 1997
Factory equipment has an initial cost
of P 200,000. Its salvage value after
ten years is P 20,000. As a
percentage of the initial cost, what is
the straight line depreciation rate of
the equipment?
A. 5%
B. 6%
C. 9%
D. 8%
172. ME Board Exam October 1997
An asset is purchased for P 120,000.
Its estimated economic life is 10
years, after which it will be sold for P
12,000. Find the depreciation for the
first year using the sum-of-the-years’
digit method.
A. P 20,000.00
B. P 18,400.00
C. P 21,080.00
D. P 19,636.00
173. ME Board Exam October 1997
An asset is purchased for P 9,000.00.
It estimated life is 10 years after
which it will be sold for P 1,000.00.
Find the book value during the third
year if sum-of-years’ digit (SYD)
depreciation method is used.
A. P 6,100
B. P 5,072
C. P 4,500
D. P 4,800
174. ME Board Exam April 1998
A machine has an initial cost of P
50,000 and a salvage value of P
10,000 after 10 years. Find the book
value after 5 years using straight line
method.
A. P 30,000
B. P 28,000
C. P 32,000
D. P 26,000
BREAKEVEN ANALYSIS
175. CE Board Exam May 1998, May
1999
A manufacturer produces certain
items at a labor cost of P 115 each,
material cost of P 76 each and
variable cost of P 2.32 each. If the
item has a unit price of P 600, how
much number of units must be
manufactured each month for the
manufacturer to break even if the
monthly overhead is P 428,000.
A. 1053
B. 1138
C. 946
D. 1232
176. CE Board Exam November 2000
The cost of producing a certain
commodity consists of P 45 per unit
for labour and material cost and P 15
for other variable cost. The fixed cost
per month amounts to P 450,000. If
the commodity is sold at P 250 each,
what is the break-even quantity?
A. 2014
B. 2178
C. 2589
D. 2367
177. EE Board Exam October 1997
The annual maintenance cost of a
machine is P 70,000. If the cost of
making a forging is P 56 and its
selling price is P 125 per forged unit.
Find the number of units to be forged
to break even.
A. 1015 units
B. 985 units
C. 1100 units
D. 1000 units
178. EE Board Exam October 1998
The annual maintenance cost of a
machine shop is P 69,994. If the cost
of making a forging is P 56 per unit
and its selling price is P 135 per
forged unit, find the number of units
to be forged to break even.
A. 886 units
B. 885 units
C. 688 units
D. 668 units
179. ME Board Exam April 1998
A company which manufactures
electric motors has a production
capacity of 200 motors a month. The
variable costs are P150 per motor.
The average selling price of the
motors is P 275. Fixed costs of the
company amount to P 20,000 per
month which includes taxes. The
number of motors that must be sold
each month to break even is closest
to
A. 40
B. 160
C. 80
D. 180
180. ME Board Exam April 1996
Steel drum manufacturer incurs a
yearly fixed operating cost of $
200,000. Each drum manufactured
cost $ 160 to produce and sells $
200. What is the manufacturer’s
break-even sales volume in drums
per year?
A. 1250
B. 2500
C. 5000
D. 1000
181. ME Board Exam October 1990
Compute for the number of blocks
that an ice plant must be able to sell
per month to break even based on
the following data:
Cost of electricity per block = P 20.00
Tax to be paid per block = P 2.00
Real Estate Tax = P 3,500 per month
Salaries and Wages = P 25,000 per
month
Others = P 12,000 per month
Selling price of ice = P 55.00 per
block
A. 1228
B. 1285
C. 1373
D. 1312
182. ME Board Exam October 2000
A factory is running at 80% efficiency
with a fixed cost of P 78,000, variable
cost per unit of P 130, selling price
per unit of P 416, and production
capacity of 5,000 units. What is the
current profit of the factory if all
product manufactured are sold?
A. P 1,066,000
B. P 1,456,000
C. P 1,213,000
D. P 1,146,000
183. ME Board Exam April 1998
XYZ Corporation manufactures
bookcases that it sells for P 60 each.
It costs XYZ P 35,000 per year to
operate its plant. This sum includes
rent, depreciation charges on
equipment, and salary payments. If
the cost to produce one bookcase is
P 50, how many cases must be sold
each year for XYZ to avoid taking a
loss?
A. 2334 cases
B. 750 cases
C. 539 cases
D. 2333 cases
COMPARISON OF ALERNATIVES
184. CE Board Exam November 1996
At 6%, find the capitalized cost of a
bridge whose cost is P 250 million
and life is 20 years, if the bridge must
be partially rebuilt at a cost of P 100
million at the end of each 20 years.
A. P 275.3 million
B. P 265.5 million
C. P 295.3 million
D. P 282.1 million
185. CE Board Exam May 1997
A corporation uses a type of motor
truck which costs P 5,000 with life of
2 years and final salvage value of P
800. How much could the corporation
afford to pay for another truck of the
same purpose whose life is 3 years
with a final salvage value of P 1,000?
Money is worth 4%.
A. P 8,450.66
B. P 7,164.37
C. P 6,393.24
D. P 9,034.56
186. CE Board Exam November 1999
To maintain his newly acquired
equipment, the company needs P
40,000 per year for the first five years
and P 60,000 per year for the next
five years. In addition, an amount of
P 140,000 would also be needed at
the end of the fifth and the eight
years. At 6%, what is the present
worth of these costs?
A. P 689,214
B. P 512,453
C. P 549,812
D. P 586,425
187. CE Board Exam November 1996
At 6%, find the capitalized cost of a
bridge whose cost is P 200 million
and life is 20 years, if the bridge must
be partially rebuilt at a cost of P 100
million at the end of each 20 years
A. P 245.3 million
B. P 215 million
C. P 210 million
D. P 220 million
188. CE Board Exam May 1997
A corporation uses a type of truck
which costs P 2 million, with life of 3
years and final salvage value of P
320,000. How much could the
corporation afford to pay for another
truck of the same purpose whose life
is 4 years with a final salvage value
of P 400,000? Money is worth 4%.
A. P 2,565,964.73
B. P 2,855,964.73
C. P 2,585,964.73
D. P 2,585,864.73
189. CE Board Exam May 1995
An investor pays P 1,100,000 for a
mine which will yield a net income of
P 200,000 at the end of each year for
10 years and then will become
useless. He accumulates a
replacement fund to recover his
capital by annual investments at
4.5%. At what rate (%) does he
receive interest on his investment at
the end of each year?
A. 10.04%
B. 8.5%
C. 11.5%
D. 17.5%
190. CE Board Exam May 1997
Machine cost = $ 15,000; life = 8
years; salvage value = $ 3,000. What
minimum cash return would the
investor demand annually from the
operation of this machine if he
desires interest annually at the rate of
8% on his investment and
accumulated a capital replacement
fund by investing annual deposits at
5%?
A. $ 5,246.66
B. $ 2,546.66
C. $ 2,456.66
D. $ 4,256.66
191. EE Board Exam April 1997
A small machine has an initial value
of P 20,000, a salvage value of P
2,000 and a life of 10 years. If your
cost of operation per year is P 3,500
and your revenue per year is P 9,000,
what is the approximate rate of return
(ROR) on the investment?
A. 20.56%
B. 21.90%
C. 23.76%
D. 24.80%
192. EE Board Exam October 1997 for the operation? There is P 400 in Batch
An investment of P 350,000 is made salvage value for the system at the Initial Cost P 50,000
to be followed by payments of P end of 10 years. Maintenance cost/year P 10,000
200,000 each year for 3 years. What A. P 2,670 Salvage value P 6,000
is the annual rate of return on B. P 2,760 Life 5 years
investment for the project? C. P 2,567 Capacity (units/year) 1,000,000
A. 41.7% D. P 2,657
B. 32.7% Continuous
C. 51.1% 197. ME Board Exam October 1997 Initial Cost P 100,000
D. 15% A fixture that costs P 700 will save P Maintenance cost/year P 36,000
0.06 per item produced. Maintenance Salvage value P 12,000
193. EE Board Exam April 1997 will be P 40 annually, 3,500 units are Life 5 years
The maintenance cost for a sewing produced annually. What is the Capacity (units/year) 2,000,000
machine this year is expected to be P payback period at 10%?
500. The cost will increase P 50 each A. 4.12 years The company uses straight line
year for the subsequent 9 years. The B. 4.65 years depreciation, pays 48% of its net
interest is 8% compounded annually. C. 5.57 years income as income tax, and has an
What is the approximate present D. 4.85 years after-tax minimum attractive rate of
worth of maintenance for the return of 15%. The company has an
machine over the full 10-year period? 198. ME Board Exam October 1997 infinite market and can sell all of the
A. P 4,700 A company puts P 25,000 down and products it produces at P 0.50 per
B. P 5,300 will pay P 5,000 every year for the life unit. Which process is more
C. P 4,300 of the machine for 10 years. If the economically beneficial for the
D. P 5,500 salvage value is zero and the interest company to use?
rate is 10% compounded annually, A. Batch processing
194. ME Board Exam October 1995 what is the present value of the B. Continuous processing
A company must relocate one of its machine?
factories in three years. Equipment A. P 56,200 BONDS
for the loading dock is being B. P 55,723 201. ECE Board Exam November 2001
considered for the purchase. The C. P 55,100 If the authorized capital stock of a
original cost is P 20,000 and the D. P 55,300 corporation is P 2,000,000 how much
salvage value of the equipment after must the paid-capital be?
three years is P 8,000. The 199. ME Board Exam October 1997 A. P 62,500
company’s rate of return on money is The balance sheet of Oriental B. P 100,000
10%. Determine the capital recovery Services, Inc. is as follows: C. P 125,000
rate per year. D. P 200,000
A. P 5,115 Asset
B. P 4,946 Cash P 10,000 202. ECE Board Exam November 1996
C. P 5,625 Receivables P 12,000 A man wants to make 14% nominal
D. P 4,805 Inventory P 7,000 interest compounded semi-annually
Capital Equipment P 20,000 on a bond investment. How much
195. ME Board Exam October 1997 Total P 49,000 should the man be willing to pay now
An item is purchased for P 100,000. for a 12%, P 10,000 bond that will
Annual costs are P 18,000. Using Liabilities mature in 10 years and pays interest
8%, what is the capitalized cost of Payables P 17,000 semi-annually?
perpetual service? Notes due P 6,000 A. P 2,584.19
A. P 350,000 Long term debt P 3,000 B. P 3,118.05
B. P 335,000 Owner’s equity P 23,000 C. P 8,940.50
C. P 320,000 Total P 49,000 D. P 8,067.82
D. P 325,000
What is the acid ratio? 203. ME Board Exam April 1998
196. ME Board Exam April 1995 A. 0.846 A company issued 50 bonds of P
The purchase of a motor for P 6,000 B. 1.115 1,000.00 face value each,
and a generator for P 4,000 will allow C. 0.592 redeemable at par at the end of 15
a company to produce its own D. 0.385 years to accumulate the funds
energy. The configuration can be required for redemption, the firm
assembled for P 500. The service will 200. ME Board Exam October 1997 established a sinking fund consisting
operate for 1,600 hours per year for A plastic manufacturing company of annual deposits, the interest rate
10 years. The maintenance cost is P produces a product from polystyrene. of the fund being 4%. What was the
300 per year and the cost to operate Two mixing processes, batch and principal in the fund at the end of the
is P 0.85 per hour for fuel and other continuous are available with the 12th year?
related cost. Using straight line following data for each process: A. P 35,983.00
depreciation, what is the annual cost B. P 38,378.00
 C. P 41,453.00 B. big income D. account book
D. P 37,520.00 C. known owners
D. goodwill 217. EE Board Exam April 1994
OBJECTIVE TYPE QUESTIONS It is the process of determining the
204. EE Board Exam April 2010 211. EE Board Exam October 1993, value or worth of a physical property
What do you call the market situation October 1994 for specific reason.
whereby there is only one buyer of an It is the difference between the A. investment
item for which there is no goods present and future worth of money at B. valuation
substitute? some time in the future. C. economy
A. Monopsony A. discount D. depletion
B. Monopoly B. deduction
C. Oligopoly C. inflation 218. EE Board Exam April 1994
D. Oligopsony D. arithmetic progression These are all the proceeds which are
received by the business as a result
205. EE Board Exam April 2010 212. EE Board Exam October 1993 of the sale of goods.
What is defined as the future value The simplest and extensively A. net income
minus the present value? employed method in computing B. gross income
A. Yield depreciation C. net revenue
B. Rate of Return A. sinking fund method D. total sales
C. Capital B. sum of integers method
D. Discount C. straight line method 219. EE Board Exam April 1994
D. fixed percentage method It is the price a buyer is willing to pay
206. EE Board Exam April 2010 a willing seller for the stock.
What is the simplest form of business 213. EE Board Exam October 1993 A. bond value
organization? It is an artificial being created by B. scrap value
A. Sole proprietorship operation of law, having the right of C. market value
B. Partnership succession and the process, D. stock value
C. Corporation attributes and properties expressly
D. Enterprise authorized by the law or incident to 220. EE Board Exam April 1994, October
its existence. 1994
207. EE Board Exam April 2010 A. corporation It is the claim of anyone to
Double taxation is a disadvantage of B. property ownership. .
which business corporation? C. partnership A. proprietorship
A. Sole proprietorship D. organization B. assets
B. Partnership C. equity
C. Corporation 214. EE Board Exam April 2004 D. liability
D. Enterprise The first cost to be incurred if the
piece of equipment now in place had 221. EE Board Exam October 1994
208. EE Board Exam April 2010 been bought from a second dealer or It is the amount of money paid for the
What do you call the increase in the some other businesses. use of borrowed capital.
value of a capital asset? A. material cost A. interest
A. Bond B. fixed cost B. rate of interest
B. T-bills C. first cost C. simple interest
C. Stock D. in-place value D. principal
D. All of the above
215. EE Board Exam April 2004 222. EE Board Exam October 1994
209. EE Board Exam 2001 It states that when of the factors of It refers to cash money and credit
What do you call the worth of production is fixed in quantity or is necessary to establish and operate
property as shown in the accounting difficult to increase, increasing the on enterprise.
records? other factors of production will result A. capital
A. use value in a less than proportional increase in B. funds
B. book value output. C. assets
C. fair value A. Law of demand D. liabilities
D. scrap value B. Law of supply and demand
C. Law of supply 223. EE Board Exam October 1994
210. EE Board Exam April 2003 D. Law of diminishing return It refers to the unrecovered
It is the element of value which a depreciation results due to poor
business has earned through 216. EE Board Exam April 1994 estimates as to the life of the
favourable consideration and The original record of a business equipment.
patronage of its customers arising transaction is recorded in this book. A. sunk cost
from its well known and well A. work book B. economic life
conducted policies and operations. B. journal C. in-place value
A. status of company C. ledger D. annuity

224. EE Board Exam April 1995
It is the share of participation.
A. franchise
B. partnership
C. stock
D. corporation
225. EE Board Exam April 1995
It is a form of business organization
in which a person conducts his
business alone and entirely for his
own profit, being solely responsible
for all its activities and liabilities.
A. Sole proprietorship
B. Entrepreneurship
C. Partnership
D. Corporation
226. EE Board Exam October 1995
It is an aggregation of individuals
formed for the purpose of conducting
a business and recognized by law as
a fictitious person is called ____.
A. Partnership
B. Investors
C. Corporation
D. Stockholders
227. EE Board Exam October 1999
It is the present worth of cost
associated with an asset for an
infinite period of time is referred as
A. annual cost
B. increment cost
C. capitalized cost
D. operating cost
228. EE Board Exam October 1999
It is a secondary book of accounts,
the information of which is obtained
from the journal.
A. balanced sheet
B. ledger
C. worksheet
D. trial balance
229. ECE Board Exam November 1998
It is series of payments occurring at
equal intervals of time where the first
payment is made after several
periods after the beginning of the
payment.
A. deferred annuity
B. delayed annuity
C. progressive annuity
D. simple annuity
230. ECE Board Exam March 1996
It is the loss of value of equipment
with use over a period of time. It
would mean the difference in value
between the net asset and the used nothing to prevent additional vendors
asset currently in service. entering the market.
A. depreciation A. perfect competition
B. loss B. monopoly
C. gain C. oligopoly
D. extracted D. elastic demand
231. ECE Board Exam April 1999 237. ECE Board Exam November 1996
It is the worth of a property as It is the amount that a willing buyer
recorded in the book of an enterprise. will pay to a willing seller for a
A. salvage value property where each has equal
B. price advantage and is under no
C. book value compulsion to buy and sell.
D. scrap value A. fair value
B. use value
232. ECE Board Exam March 1996 C. market value
It is a stock that has prior rights to D. book value
dividends. It usually does not bring
voting rights to the difference in value 238. ECE Board Exam March 1996
between the net asset and the used It is defined as the capacity of a
asset currently in service. commodity to satisfy human want.
A. preferred stock A. discount
B. common stock B. luxuries
C. voting stock C. utility
D. non-par value stock D. necessity
233. ECE Board Exam November 1995 239. ECE Board Exam April
These are products or services that 2000/November 2001
are desired by humans and will be Reduction in the level of national
purchased if money is available after income and output usually
the required necessities have been accompanied by fall in the general
obtained. price level.
A. utilities A. Devaluation
B. necessities B. Deflation
C. luxuries C. Inflation
D. producer goods and services D. Depreciation
234. ECE Board Exam November 1995 240. ECE Board Exam April 2001
These are products or services that A formal organization of producers
are required to support human life within an industry forming a perfect
and activities, that will be purchased collusion purposely formed to
in somewhat the same quantity even increase profit and block new corners
through the price varies considerably. from the industry.
A. utilities A. monopoly
B. necessities B. corporation
C. luxuries C. competitors
D. producer goods and services D. cartel
235. ECE Board Exam November 1995 241. ECE Board Exam April 2001
A condition where there are only few The paper currency issued by the
individuals produce a certain product Central bank which forms part of the
and that action by one will lead to country’s money supply.
almost the same of the others. A. T-bills
A. oligopoly B. Check
B. semi-monopoly C. Coupon
C. monopoly D. Bank note
D. perfect competition
242. ECE Board Exam November 2001
236. ECE Board Exam November 1995 It is the decrease in the value of a
This occurs in a situation where a property due to the gradual extraction
commodity or service is supplied by a of its contents.
number of vendors and there is A. depreciation
B. depression
 C. depletion B. a liability 256. ME Board Exam October 1997
D. diminishing returns C. an expense It is the worth of property which is
D. owner’s equity equal to the original cost less
243. ECE Board Exam April 1996 depreciation.
It is a form of summary of assets, 250. ME Board Exam April 1997 A. scrap value
liabilities and net worth. It is the decrease in value of a B. earning value
A. balance method physical property due to the passage C. book value
B. break-even point of time. D. face value
C. balance sheet A. inflation
D. production B. depletion 257. ME Board Exam October 1997
C. recession Intangible assets of a corporation or
244. ECE Board Exam April 1996 D. depreciation company
The worth of a property, which is A. daction-en-pago
equal to the original cost less 251. ME Board Exam October 1997 B. investment
depreciation, is known as This form of business ownership is a C. patents
A. earning value legal entity possessing many of the D. equity
B. scrap value legal powers of individuals. It can
C. book value hold title to property, sue and be sued 258. ME Board Exam October 1997
D. face value in its own name. It is called Additional information to prospective
A. corporation bidders on contract documents
245. ECE Board Exam November 1996 B. company issued prior to bidding date.
We can classify an interest rate, C. general partnership A. escalatory
which specifies the actual rate on D. individual proprietorship B. delicts
interest on the principle for one year C. technological assessment
as 252. ME Board Exam October 1997 D. bid bulletin
A. nominal rate The balance sheet is a statement
B. rate of return showing the financial status of the 259. ME Board Exam October 1997
C. exact interest rate company at any given time. Which of A civil wrong committed by one
D. effective rate the statements is not part of the person causing damage to another
balance sheet? person or his property or reputation
246. ECE Board Exam November 1997 A. liabilities A. tort
A market whereby there is only one B. asset B. negligence
buyer of an item for which there is no C. cost of goods sold C. material breach
goods substitute D. net worth D. fraud
A. Monopoly
B. Oligopoly 253. ME Board Exam October 1997 260. ME Board Exam April 1998
C. Oligopsony It refers to the cost of merchandise What is an annuity?
D. Monopsony which excludes freight and insurance A. A series of equal payments at
cost. equal time periods
247. ME Board Exam April 1996 A. freight-on-board B. The cost of manufacturing a
When using net present worth B. sunk cost product
calculations to compare two projects, C. debentures C. An investment that yields an
which of the following could invalidate D. book value equal amount of interest each
the calculations? year
A. mutually exclusive projects 254. ME Board Exam October 1997 D. The overhead cost per unit of
B. evaluation over different periods A fund into which annual deposits of production
C. non-conventional cash flows A are made in order to accumulate
D. difference in the magnitude of fund F at n years in the future. 261. ME Board Exam April 1998
the projects A. amortization Consist of the actual counting or
B. annuity determination of the actual quantity of
248. ME Board Exam April 1996, April C. depreciation the materials on hand as of a give
1997 D. sinking fund date
Which of the following is a form of A. physical inventory
business/company ownership? 255. ME Board Exam October 1997 B. technological assessment
A. partnership Cash money credit necessary to C. material update
B. corporation establish and operate on enterprise. D. material count
C. single proprietorship A. funds
D. all of these B. capital 262. ME Board Exam April 1998
C. liabilities It is an artificial expense that spreads
249. ME Board Exam April 1997 D. assets the purchase price of an asset or
What is work-in-process classified other property over a number of
as? years.
A. an asset A. depreciation
 B. amnesty
C. sinking fund
D. bond

263. ME Board Exam April 1998

Estimated value at the end of the
useful life
A. salvage value
B. economic life
C. balance sheet
D. compounded annually

264.
A.
B.
C.
D.

265.
A.
B.
C.
D.

266.
A.
B.
C.
D.

267.
A.
B.
C.
D.