Republic of the Term Examination:  OF SOUTHERN Course Code: Math

Philippines Prelims  PHILIPPINES 212

Midterm College of Science Course Title :
UNIVERSITY OF
and Technology Mathematics of
SCIENCE AND
 Semi-Finals  Education Investment
TECHNOLOGY Date: January 14,
Final Department of
Mathematics 2022
Education

a. Borrow from a bank that offers

1. What is the idea behind simple interest?
a. the amount of interest is the sum of 1 and
the product of the rate of interest and the
period of time
b. the amount of interest is the product of
the rate of interest, the principal amount,
and the period of time.
c. the amount of interest is the ratio of the
principal amount to the product of the rate
of interest and the period of time
d. the amount of interest is the sum of the
principal amount and the accumulated
value
2. Which of the following will yield the
highest interest?
a. Ordinary interest, approximate time
b. Ordinary interest, actual time
c. Exact interest, approximate time
d. Exact interest, actual time
3. Ordinary interest is to banks, as exact
interest is to:
a. borrower
b. payee
c. investee
d. lender
4. What does compounded quarterly
mean?
a. The principal amount compounds
every 3 months in a year
b. The principal amount compounds
every 4 months in a year
c. The principal amount is doubled 4
times in a year
d. The principal amount is compounded
in 3 years
5. Which of the following options is BEST to
do when borrowing from a bank?
compound interest
b. Borrow from a bank that offers simple
interest
c. Borrow from a bank that offers
nominal rates
d. Borrow from a bank that offers 4%
per year, compounded monthly
6. What is the periodic term of the situation
below?
Dave needs to repay his debt to Mark by
paying P3,000.00 at the end of every 6
months for 4 years in a bank account that
gives an interest rate of 5.25%
compounded semi-annually.
a. P3,000.00
b. Semi-annually for 4 years
c. 5.25%
d. 2
7. What is the gradual extinguishment of
any amount over a period of time, that is,
the extinction of a debt, principal and
interest by means of a sequence of equal
periodic payments or instalment
payments due at the end of equal
intervals of time?
a. Amortization Schedule
b. Sinking Fund
c. Amortization
d. Sinking Fund Schedule
8. Which shows the amount of interest
earned every period, and the amount
before and after periodic deposits?
a. Amortization Schedule
b. Sinking Fund
c. Amortization
d. Sinking Fund Schedule

9. Which of the following refers to a usually
long-term obligation of a borrower to pay
a lender their principal and usually
interest on a loan.
a. Promissory Note
b. Bond
c. Bond Valuation
d. Amortization
10. Which refers to the decrease in value of
an asset through use and passage of
time?
a. Sinking Fund
b. Bond
c. Amortization
d. Depreciation
11. Which of the following statements is
FALSE?
a. The bigger the rate, the bigger the
interest is even if principal and time are
not kept constant
b. Given the same values, compound
interest will yield greater interest than
simple interest
c. The use of ordinary interest will yield
higher interest than exact interest
d. The accumulated amount usually is
bigger than the principal amount when
doing investments.
12. What is most likely to happen to the
simple interest and accumulated amount,
where the time is changed from 4 to 3
years?
a. Both Simple interest and
accumulated amount will increase.
b. Simple interest will decrease but the
accumulated amount will increase.
c. Both Simple interest and
accumulated amount will decrease.
d. Simple interest will increase but the
accumulated amount will decrease.
13. Which of the following factors is the
GREATEST under your control when it
comes to compound interest?
a. The interest rate
b. The principal
c. The number of periods
d. The term
14. Which of the following statements is
FALSE?
a. Simple interest is calculated using
only the principal amount of the loan.
b. Compound interest is calculated
using the principal amount of the
loan, plus the interest that has
accumulated over previous periods.
c. Compound interest is the more
affordable option for borrowers.
d. There is a way for an investor who
invested in simple interest to have the
same accumulated amount with that
of the compound interest.
15. Which of the following is an example of
simple annuity?
a. at the end of every 3 months at 3%
compound quarterly
b. at the end of every year at 5%
compounded quarterly
c. at the beginning of every year at 5%
compounded quarterly
d. at the beginning of every 6 months at
3% compounded quarterly
16. What is the annuity that begins at the end
of the first payment interval?
a. Simple annuity
b. Ordinary Annuity
c. Deferred annuity
d. Annuity due
17. What happens to the interest paid each
payment in an amortization schedule?
a. decreases
b. increases
c. remains the same
d. doubles
18. Mr. Cruz solves for the outstanding
principal in an amortization by
subtracting the accumulated value of the
past payments from the accumulated
value of the loan. Which method does the
Mr. Cruz use?
a. Prospective Method
 b. Retrospective Method annuity payment is closest to which of the
c. Straight Line Method following?
d. Declining Balance Method a. P154.73
19. What can be said when a bond is bought b. P147.36
at a value lower than the redemption c. P109.39
value? d. P104.72
a. The bond is bought at par 27. –
b. The bond is bought at premium 28. A credit card company offers a deferred
c. The bond is bought for free payment option for the purchase of any
d. The bond is bought at discount appliance. Dave plans to buy a smart
television set with monthly payment of ₱
20. Which method of depreciation is used 4,000.00 for two years. The payment will
when the annual depreciation amount is start at the end of 4 months. If it is 10%
fixed? compounded quarterly, what is the period
a. Prospective Method of deferral?
b. Retrospective Method a. 1
c. Straight Line Method b. 2
d. Declining Balance Method c. 3
d. 4
21. – 23. Celine invested an amount of 29. – 30. What is the outstanding principal at
P20,000.00 divided in two different the end of 3 years of a P50,000.00 loan
schemes A and B at the simple interest with interest at 5% compounded
rate of 5% annually and 7% annually quarterly which is to be amortized by
respectively. The total amount of simple payments of P1,500.00 at the end of
interest earned in 2 years is P2,200.00. each 3 months for as long as necessary?
a. P40,274.39
How much was invested in schemes A
b. P41,532.71
and B respectively?
c. P34,607.73
a. P15,000.00 and P5,000.00
d. P38,747.18
b. P5,000.00 and P15,000.00
30. –
c. P10,000.oo each
31. – 32. What is the present value of the
d. P18,000.00 and P2,000.00
loan which is to be amortized by equal
22. –
payments of P3,000.00 each at the end
23. – of each three months for 5 years if
24. – 25. If your friend offers you to invest, interest is 8%, m=4?
which is better to choose, to deposit in a a. P27,563.62
mutual fund that earns at 17% b. P29,454.44
compounded semi-annually or in bonds c. P49,054.30
that pay 17.2% effective rate? d. P135,859.62
a. Mutual funds 32. –
b. Bonds 33. – 34. What is the coupon payment for a
c. Both are equal P50,000.00, 10% bond with quarterly
d. It is better not to invest coupons redeemable at 115% at the end
25. – of the 10 years?
26. – 27. An 8-year annuity due has a a. P1,250.00
present value of P1,000.00. If the b. P1,300.00
interest rate is 5%, the amount of each c. P1,500.00
d. P1,520.00
34. – 42. Which of the following is the difference
35. What is the original cost given that the between ordinary annuity and annuity
accumulated depreciation charge is due?
P23,120.00 and the book value is a. Periodic payments
P864.00? b. Payment interval
a. P22,000.00 c. Term of payment
b. P22,256.00 d. Timing of payments
c. P23,000.00 43. –47. Construct an amortization schedule
d. P23,984.00 from the situation below.
36. – 37. What is the interest on P15,000.00
loan for 12 months at an interest rate of A loan of P18,000.00 is to be repaid with
14%? equal quarterly payments for 1 year with
a. P2,000.00 an interest rate of 9.5%, m=4.
b. P2,100.00
c. P2,200.00 44. –
d. P2,384.00 45. –
46. –
37. – 47. –
38. – 40. Siri owes P3,000.00 due in 2 years 48. – 50. What is the purchase price of a
and P5,000.00 due in 5 years. She bond valued at P45,000.00 with interest
already made payment worth P3,100.00 at 5% payable semi-annually and
on the 3rd year. She is allowed to settle redeemable at 97% in 16 years if the
these obligations by a single payment on bond yields 6.5%, m=2 on the
the 4th year. investment?
Find how much she has to pay on the 4th
year if money is worth 12% compounded -------------------------END--------------------------
semi-annually.
a. P3,825.43
b. P4,754.25
c. P4,745.52
d. P8,100.00

39. –
40. –
41. Consider the problem below.
A four-year lease agreement between Hazel
and SM Mall indicates that, Hazel pays SM
Mall P100,000.00 every month starting in 2
years if the agreed interest rate is 2%
compounded monthly.
What type of annuity is it?
a. Ordinary
b. Annuity due
c. Deferred annuity
d. General annuity