Bes 4 Term Requirement

Republic of the Philippines
Northwest Samar State University

Rueda St., Calbayog City 6710
Website: http//www.nwssu.edu.ph
Email: main@nwssu.edu.ph
ISO 9001:2015 Certified
Telefax: (055) 2093657
COLLEGE OF ENGINEERING AND ARCHITECTURE
TERM REQUIREMENT
ENGINEERING ECONOMICS
AA
1ST SEMESTER 2021-2122

BES 4 – Engineering Economics
CHAPTER 2
PRESENT ECONOMY
P2 – 01 (C.E. Board, January 1924)

A contractor has 50 men of the same capacity at work on a job. They can complete
the work in 30 days, the working day being 8 hours, but the contract expires in 20 days.
He decides to put 20 additional men. If all the men get P3.00 per day for a full or part time
day, and if the liquidated damages are P100.00 for every full or part day he requires over
his contract time, will, he complete the work on time, and if not, would he save money by
putting enough men to complete it on time?
GIVEN:
50 men; 30 days; 8 hours; 20 days; additional 20 men; P3 per day; P100 liquidated
damage per day
SOLUTION:
1 𝑑𝑎𝑦
(50 + 20)8 = 560 hours ( )
24ℎ𝑜𝑢𝑟𝑠
= 23.33 days
For liquidated damage = 100 × 3.33 = P333
Therefore, he still can’t finish the work with additional 20 men. He also can’t save
money due to the 3.33 days delayed that cost P333.
P2 – 02 (C.E. Board, February 1953)

A building contractor has a contract which will expire in 30 days. He has 80 men
on the job and can finish the job in 50 days. The wage per day of 40 men is P6.00 each
and that of the other 40 men is P4.00 each for 8 hours work per day. The fine or liquidated
damages for delay in the work is P100.00 per day. How many more men should the
contractor add in order to enable him to complete the work on time? Assuming that the
additional men to be added will be paid P6.00 per day, will the contractor save money by
employing enough men for him to complete the work on time or by not adding more men
and paying the Fine? How much is the savings, if any? No overtime work is permitted.
GIVEN:
No. of workers = 80 men
No. of days that workers finish job = 50 days
Expiration of contract = 30 days
Salary per day for 40 men = P6.00 (8hrs/day)
Salary per day for other 40 men = P4.00 (8hrs/day)
Cost of delay = 100 per day
A. Additional number of men in order to complete the work on time.

Solve for the number of working hours per men:
50 days × 8hrs = 400 hours
total workers = 80 men
number of working hours = 400hrs/80men = 5hrs per men
To complete the work on time project duration = 30 days needed

30days x 8hrs = 240hrs
number of hours needed = 400hrs
To complete the project: 400 - 240 = 160hrs
SOLVE FOR ADDITIONAL WORKERS
Additional number of hours needed= 160hrs
Numbers of working hours used/men = 5hrs/men
Additional workers = 160hrs/5hrs = 32men
B. Solve for total cost of the project when completed in 50days

Labor cost for 40men at P6.00/day= 40men × (P6.00/day) (50days) = P12000
Labor cost for 40men at P4.00/day 40men × (P4.00/day) (50days) = P8000
No. of days delay at P100/day = 20days x (P100/day) = P2000
Total cost= P22000
Using additional no. of workers where project completed within 30days
Labor cost for 40men at P6.00/day = 40men × (P6.00/day) (30days) = P7200
Labor cost for 40men at P4.00/day = 40men × (P4.00/day) (30days) = P4800
Additional labor cost for 32men at P6.00/day= 32men × (P6.00/day) (30days) = P5760
Total cost = P17760
Therefore, the contractor will be able to save, and have a savings of P22000 - P17760 =
P4240
P2 – 03 (C.E. Board, November 1982)

A building contractor la faced with the problem of possibly paying liquidated
damages of P2,000 per day for the delay in the completion or his work in accordance with
a contract. The facts are as follows:
(a) Number of days left on the contract time - 30 days.
(b) At present the working force is:
40 skilled workers with a daily wage of P40.00 each
20 unskilled workers with a daily wage of 32.00 each
(c) The daily wage is based on an 8-hour day's work
(d) If he maintains the present number of men, he will finish the work in 50 days
(e) Overtime rate is 25% more than regular rate.
Analyze the following cases:

Case 1: If he allows the present working force to work overtime of 2 hours a day. In how
many days will he finish the work? How much are his savings or lose?
Case 2: If the contractor puts additional men maintaining the ratio of two skilled workers
to one unskilled worker in order to finish the work on time, how many will he add?
consider no overtime work.
Case 3: Should the contractor allow overtime work of two hours a day, how many men
will he add in order to finish work in time? How much will he save or lose?
SOLUTION:
CASE 1:
Use formula = P1H1D1/W 1 = P2H2D2/W2
P1 = 40 + 20 = 60 workers W1 = W2 H1 = 8 hours
P2 = 60 workers D2 = ? H2 = 8 + 2 = 10 hours
(60×8×50) (60×10×𝐷2 )
= = = 𝐷2 = 40 𝑑𝑎𝑦𝑠 Therefore, work will finish in 40 days.
𝑊1 𝑊2
8hour payment for skilled workers = 40, therefore, 2hour payment for skilled worker
= (40/8) × 2 = 10
Overtime rate is 25% more, therefore, 2hour overtime payment for skilled worker
= 1.25 × 10 = 12.5
Amount payed for overtime = (40×12.5×20×10) × 40 = P28000

Amount saved due to liquidated damages = 2000(50 – 40) = P20000
CASE 2:
Use formula = P1H1D1/W 1 = P2H2D2/W2
P1 = 60 workers W1 = W2 H1 = 8 hours H2 = 8 hours
P2 = ? D1 = 50 days D2 = 30 days
Extra worker added = 100 – 60 = 40

but to maintain 2 skiller + 1 unskilled ratio, add 28 skilled + 14 unskilled workers
CASE 3:
Use formula: W 1 = W 2
P1 = 60 P2 = ? H1 = 8 hours H2 = 10 hours
D1 = 50 days D2 = 30 days
(60 × 8 × 50) (𝑃2 × 10 × 30)

= = = 𝑃2 = 80
𝑊1 𝑊2
Extra men added: 80 – 60 = 20 to maintain ratio add 21 workers (7 unskilled + 14

skilled) saving due to liquidated damages = 2000 × 20 = P40000
Saving due to 20 days = (40 × 40 + 20 × 32) × 20 = P44800
Payed for overtime + extra worker = (14 × 40 + 7 × 32) ×30 + (54 × 12.5 + 27 ×
10) × 30 = P28350 + P23620
Therefore, net saving = 44800 + 40000 – 28350 – 28350 = P32930
P2 – 04 (ECE Board, February 1979)

A man would like to invest P50,000 in government bonds and stocks that will give
an overall annual return of 5%. The money to be invested in government bonds will give
an annual return of 41/2% and the stocks of about 6% annual return. The Investments
are in units of P100.00 each. If he desires to keep his stock investment to a minimum in
order to reduce his risk, determine how many government bonds and how many stocks
should he purchase?
GIVEN:
Invest = 50000 Stock = 6% or 0.06
Annual return = 5% or 0.05 Investment unit = P100 each
SOLUTION:
Let x = the amount to invest in government bonds
Let y = the amount to invest in stocks
x + y = 50000
return from bond 0.045x
return from stock 0.06y
(0.45 + 0.06)
= 0.045𝑥 + 0.06𝑦 = 5% 𝑜𝑟 = 0.05
50000
Substitution:
y = 50000 – x
(0.045𝑥+0.06(50000−𝑥) 0.05
= 0.05 3000 − 0.015𝑥 =
50000 50000
(0.045+3000−0.06𝑥)
= 0.05 3000 − 0.015𝑥 = 2500
50000
3000−0.015𝑥
= 0.05 add 0.015x and subtract 2500
5000
500 = 0.015x
500
0.015
=𝑥
x = 33333.333
since y = 50000 – x
y = 16666.666
P2 – 05 (EE Board, April 1984)

A contract is let for 10,000. It is to be completed in four weeks time, subject to a
penalty of P240 per day if that time 1. exceeded. At the end of 3 weeks the work is 60%
complete. Cost of labor was initially estimated at P4,000 when working 40 hours per week.
If overtime labor must be compensated at double time and work is 8 hours per day straight
time, on the revised work schedule determined:
(a) Would it be cheaper to take the penalty or to complete the job by working
overtime?
(b) By what percent would the estimated labor cost be increased by the
cheaper plan?
Given that
Total contract = P10,000
It is to be complete in 4 weeks.
Penalty cost = P240
At the end of 3 weeks, the work is 60% complete

40% work is remaining and we have time only 1 week
The Labor cost is P4,000 when working 40 hours per week in 4 weeks
In 1-week labor cost = P1,000
In 4 weeks, total working hours is equal to 160 hours and cost is P4000
In 1 hours cost of labor
As per the work progress

60% work complete in 3 weeks then in 1 week complete 20% work
for completion Remaining 40% work need 2 more weeks
but total time is only 4 weeks
Here taking total time 5 weeks i.e 1 week extra time
Total cost of 1 week extra time =
Labor cost + Penalty cost
In 1 week Labor cost = P1,000
Penalty cost = P240 × 7 = P1,680
Total cost of 1 week extra time = P1,000 + P1,680 = P2,680
According to Revised Work Schedule

8 hours Per day Straight time and overtime compensate at double time
Labor cost per hours = P25
For the completion of Work on time Labor needs to work 80 hours in 1 week.
if 8 hours per day then in 1 week Total hours = 8hours/day 7 day = 56 Hours
In which Remaining Time = 80 56 24hours
overtime work = 24 hours
Total cost of Labor = Straight 8 hours Per day cost + Overtime Cost
Straight 8 hours Per day cost = 25 × 8 hours / day = P200
In 1 week cost = P200 7 P1400
Overtime Cost of compensated by Double time = 24 × 2 × P25 = P1200
Total cost = P1400 + P1200 = P2600
Question A: Question B:
Penalty cost = P2680 Labor cost per week = P1000
Overtime cost = P2600 Overtime work labor cost = P2600
Therefore, working overtime is cheaper. Increased labor cost = P2600 – P1000
= P1600
% increased = (1600/2600)100 = 53.63
P2 – 06 (ME Board, October 1986)

The monthly demand for ice cans being manufactured by Mr. Cruz is 3,200 pieces.
With a manually operated guillotine the unit cutting cost is P25.00. An electricity operated
hydraulic guillotine was offered to him at a price of P275,000 and which reduced by 30%
the unit cutting lost. Disregarding the cost of money, how many months will Mr. Cruz be
able to recover the cost of the machine if he decides to buy now?
GIVEN:
3200 pieces ice cans
P25.00
P275000
30%
SOLUTION:
Solve for unit cutting cost: 25 × 0.3 = 7.5
Solve for the monthly sales: 3200 × 7.5 = P24000
Solve for the number of months to recover the P275000: 275000 ÷ 24000 = 11.5
months
P2 – 07 (ME Board, April 1987)

In a gold mining area in Davao the ore contains, on the average, one ounce of gold
per ton. One method of processing "A" costs P1,500 per ton and recovers 90% of the
gold. Another method "B" costs only P1,200 per ton and recovers 80% of the gold. If gold
can be sold for P4,000 per ounce, which method is better and by how much?
GIVEN: 1 oz/ton ; P1500/ton = 90% ; P1200/ton = 80% ;

P2400
SOLUTION:
Method A: Method B:
Solve for income: Solve for income:
0.90 × 4000 = P3600 0.8 × 4000 = P3200
Calculate the net income: Calculate the net income:
P3600 – P1600 = P2100 P3200 – P1200 = P2000

A cement kiln with production capacity of 130 tons per 24-hour, day of clinker has
its burning zone, about 45 tons of magnesite chrome bricks being placed periodically
depending on some operational factors and the life of the bricks. If locally produced bricks
cost $ 25,000 per ton and have a life of 4 months, while certain imported bricks costing
P30,000 per ton and have a life of 6 months, determine the more economical bricks and
by how much?
GIVEN: 130 tons/24hour ; 45 tons

P25000/4 months ; P30000/6 months
SOLUTION:
For local bricks: For imported bricks:
Assume 1 year; Assume 1 year;
12𝑚𝑜𝑛𝑡ℎ𝑠 12𝑚𝑜𝑛𝑡ℎ𝑠
25000 × ( 4𝑚𝑜𝑛𝑡ℎ𝑠 ) × 45 30000 × ( 6𝑚𝑜𝑛𝑡ℎ𝑠 ) × 45
= P3375000 = P2700000
Difference of two bricks:

= P3375000 - P2700000 = P675000
Therefore, imported bricks is more economical than local bricks by P675000.

An equipment installation job in the completion stage can be completed in 40 days
of 8 hours work per day with 40 men working. With the contract expiring in 30 days, the
mechanical engineer contractor decided to add 10 more men on the job, overtime not
being permitted. If the liquidated damages are P2,000 per day of delay, and the men are
paid P80.00 a day, will the engineer be able to complete the job on time? Would he save
money by adding more men?

A jewelry craftsman needs 100 grams of gold alloy containing 75% pure gold for
his products. Only two alloys of gold are available from a Davao supplier, the first 80%
pure gold and the other 60% pure gold. How many grams of each gold alloy must he buy
to suit his requirements?
GIVEN: 80% ; 60%

SOLUTION:
For 60% pure gold: For 80% pure gold:
0.8x + 100 – 0.6(100 – x) = 100(0.75) 100 – 25 = 75 grams
0.8x + 100 – 60 + 0.6x = 75
1.4x + 40 = 75
x = 25 grams
The craftsman must buy 75 grams of 80% pure gold and 25 grams for 60% pure
gold.

The quarrying cost of marble and granite blocks plus delivery cost to the
processing plant for each is P2,400 per cubic meter. Processing cost of marble into tiles
is P200 per sq.m., and that of granite into tiles is P600 per sq.m.
If marble has a net yield of 40 sq.m. or tiles per cu.m. cf block and salls at P400
per sq.m., and granite gives a net yield of 50 sq.m. of tiles per cu.m. of block, and sells at
P1,000 per sq.m., determine the more profitable material considering all other costs to be
the same, and by how much?
CHAPTER 3
INTEREST AND DISCOUNT

5 years ago, a house was purchased for P34,000 if it is said to day for 50,000,
What is the rate of appreciation of its value?
Solution:
V = I (1+i)n
50,000 = 34,000(1+i)5
50,000 = 34,000(5i)
50,000/170,00 = 170,00i/170,000
i = 0.29%

Annie buys a television set from a merchant who asksvP12,500. At the end of 60
days (cash in 60 days). Annie wishes to pay immediately and the merchant offers to
compute the cash price in the assumption that money is worth 8% simple interest. What
is the cash price today?

Juan Dela Cruz borrowed money from a bank. He received P1340 and promised
to pay P1500 at the end of a months. Determine the following:
a.) rate of simple interest. b.) The corresponding discount rate:
Given: d = (P/F i%,1)
F=1500 d = 1-i/(1+i)
N=9/12 or 0.75 d = 1-0.159/(1+0.159)
P=1340 d = 0.86 or 86%
Solution:
F = P(1+in)
1500/1340 =1340(1+i(0.75))/1340
1.119 = 1+i(0.75)
i = 0.159 or 15.9%

A man borrows money from a bank which uses a simple discount rate of 14%. He
signs a promissory note promising to pay a P500 pre-month at the end of 4th, 6 th and
7th months, respectively. Determine the amount he received from the bank?
P3 – 05 (ECE Board, August 1979)

An amount of P3, 000 is invested for 9 years at 6% compounded quarterly.
Determine the amount of interest from the earned by the investment.

If P10, 000 is invested at 12%, interest compounded annually, determine how
many years it will take to double?
P3 – 07 (ECE Board, September 1982)

Which is better for an investor, to invest at 5 ½% compounded semi-annually as
5% compounded monthly?

Mr. W borrowed P2, 000 from Mr. Y on June 1, 1928 and P500 one June 1, 1930.
Mr. W paid P500 on June 1, 1931, P400 one June 1932 and P700 on June 1, 1933. If
money is worth 5% compounded annually, what additional payment should Mr. W pay on
June 1, 1936 to discharge all remaining liability?
Solution:
Inflow = outflow
2,000(F/P, i%, n) + 500(F/P, i%, n) = 500(F/P, i%, n) + 400(F/P, i%, n) + 700(F/P, i%, n)
+x
2,000(1 + 5%)8 + 500(1 + 5%)6 = 500(1+5%)5 + 400(1+5%)4 +700(1+5%)3 + x
x =1, 690.28
P3 – 09 (ME Board, September 1979)

How long will it take P500 to be four times in value if invested at the rate of 7%
compounded semi-annually? What is the effective rate of interest? Solution:
Given: P = P500 i = 7% F = 2, 000

Solution:
F = P (1+i)n
(In F/P)/(In (1+i)) F/P = (1+i) (In 2000/500 = 2t )/(In 1+ 3.5%)
(In F/P)/(In (1+i)) = n t = 20.15 years

It is the practice of almost all banks in the Philippines that when they grant a loan,
the interest for one year is automatically deducted from the principal amount upon release
of money to a borrower. Let us therefore assume that you applied for a loan with a bank
and the P 80,000 was approved at an interest rate of 14 o/o of which P 11 ,2AO 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?
Solution:
l = Pin
11,200 = 68,800(i) (1)
i = 0.1628
i =16.28%
.'. The effective rate of interest is 16.28 %
P3 – 11 (ME Board, 1987)

The sum of P26, 000 was deposited in a fund earning interest at 8% interest per
annum compounded quarterly. What was the amount in the fund at the end of 3 years?
Given: P = 26, 000 i = (8%)/4 = 2%

Solution:
F = P (1+i)n
F = P26,000 (1+2%)4(3)
F = 3,297.43

The Philippines Society of Mechanical Engineer is planning to construct its own
building. Two proposals are being considered:
a.) The construction of the building now to cost P400, 000.
b.) The construction of a smaller building now to cost P300, 000 and at the end of 5
years, an extension to be added to cost P200, 000, which proposal is more
economical, if interest is 20% depreciation is disregarded and by how much?
Solution: b.) P = P300, 000 i = 20% F = F (1+i) n = P300,000 (1+20%) 5 F = P

946,496
Given:
a.) Given: P = 400, 000 i = 12%
Solution:
F = P (1+i)n
= 400,000 (1+0.20)5
= 995,328
b.) Given: P = P300, 000 i = 20%
Solution:
F = F (1+i) n
= P300,000 (1+20%)5
= P 946,496

If the sum of P15, 000 is deposited in an account earning 4% per annum
compounded quarterly, what will be the amount of the deposited at the end of 5 years?
Solution:
Given: P = P15, 000 i = (4%)/4= 1%
Solution:
F = P (1+i)n
= 15,000 (1+1%)5(4)
= 18,302.85
P3 – 14 (ME Board, June 1990)

A man who won P 300,000 in a lottery decided to place so% of his winning in a
trust fund for the college education of his son. lf the money will earn M% per year
compounded quarterly, how much will the man have at the end of 10 years when his son
will be starting his college education?
Solution:
F = P(1+ i)n
F =150,000(1+ 0.14/4 )4(10)
F = 593,888.96
The man will have P 593,888.96 at the end of 10 years.
P3 – 15 (Geodetic Engineering Board, August 1980 and February 1982)

A man borrowed 25,000 from a bank which he signed a promissory note to repay
the loan at the end of one year. He only received the amount of 21,915 after the bank
collected the advance interest and an additional amount of 85.00 for legal fees. What was
the rate of interest that the bank charged?
Given:
Amount received = 21 ,915 + 85
Amount received = 22,000
lnterest = 25,000 -22,000
lnterest = 3,000
Solution:
l = (P)(i)(n)
3,000 = (22,000)(i)(1)
i = 0.1364
i =13.64%
.'. The rate of interest the bank collected in advance is 13.64 %.
CHAPTER 4
ANNUITIES AND CAPITALIZED COST
P4 – 01 (Ch.E. Board, November 1982)

A house and lot worth P87,000 were offered at 10% down payment and P500 per
month for 25 years, what is the effective monthly interest rate on the diminishing balance?
SOLUTION:
Price of the house = 87000
Loan Amount = 87000 * (1 - 0.1) = 78300
EMI = 500 Duration = 25 Years
The PW of the loan is 78300 and EMI is 500 while the duration of that loan is 300
months.
The interest rate can be calculated by the trial-and-error method using the software.
If we take 0.4922% as monthly interest rate then
= PMT(0.4922%,300,-78300)
= 500.02 The monthly interest is 0.4922%
Effective interest rate = (1+0.004922)^12

=1.060
(1.06 – 1)*100 = 6%
P4 – 02 (CE Board, November 1978)

The average annual cost of damages caused by floods at Dona Rosario Village
located along Butuanon river is estimated at P 700,000. To build a gravity dam to protect
the area from the floods, would cost P 2,500,000 and would involve an annual
maintenance cost of P 20,000. With interest at 8% compounded annually, how many
years will it take for the dam to pay for itself?
SOLUTION:
x=A-B
x = 700,000-20,000
x = 680,000
Using equivalent (reduced) cash flow:

Cost of dam = 2,500,000 = P
𝑥[(1 + 𝑖)𝑛 − 1
𝑃 =
(1 + 𝑖)𝑛 𝑖
680,000[(1 + 0.08)𝑛 − 1
2,500,000 =
(1 + 0.08)𝑛 (0.08)
(1.08) -1 = 0.294(1.08)n
n
1 = (1.08)n(0.706)
1.4164 = (1.08)n
log1.4164 = nlog1.08
log1.4164
𝑛 =
log1.08
n = 4.523 years
The dam will pay for itself in 4.5 years.
P4 – 03 (CE Board, April 1981)

A man wishes to have P35,000 when he retires 15 years from now. If he can expect
to receive 4% annual interest, how much must he set aside beginning at the end of each
of the 15 years?
GIVEN:
F = 35,000
i = 4%
n = 15 years
A = F (A/F, i%, n)
𝐴 = 35,000[4%/(1 + 4%)15 − 1] = 1,747.94
P4 – 04 (CE Board, October 1981)

An investor deposits P1,000 per year in a bank which offers an interest of 18% per
annum for time deposits of over 5 years. Compute how much the investor can collect at
the end of 13 years, assuming that he never withdraws any amount before the 13th year.
F = A (F/A, i%, n)
(1 + 18%)5 − 1
𝐹 = 1,000 ( )
18%
F = A (F/A, i%, n)
F = P (1+i)n
F = 7,154.21 ( 1+18%)8
F = 26,891.67

A man wishes to prepare the future of his ten-year old son. Determine the monthly
savings that he should make with interest at 5.41% per annum to amount to P120,000 at
the time his son will be 18 years old.
ERmonthly= ERper annum
(1+i)m – 1 = (1+i)m – 1
(1 + 𝑖)12 − 1 = (1 + 5.41%/1) 1 − 1
𝑖 = (1 + 5.41%)1/12 − 1
i = 0.44%
A = F (A/F, i%, n)
0.44%
𝐴 = 12,000 ( )
(1 + 0.44%)96 − 1
A = 1,007.2

A building and loan association requires that loans be repaid by uniform monthly
payments which include monthly interest calculated on the basis of nominal interest of
5.4% per annum. If P5,000 is borrowed to be repaid in 10 years, what must the monthly
payment be?
ERmonthly= ERperannum
(1+i)m – 1 = (1+i)m – 1
(1 + 𝑖)12 − 1 = (1 + 5.41%/1) 1 − 1
𝑖 = (1 + 5.41%)1/12 − 1
i = 0.44%
A = P (A/P, i%, n)
0.44%
𝐴 = 5,000( )
(1 + 0.44%)−12(10)
A = 53.72

You want to start saving for your ten-year old son’s college education. If you are
guaranteed 6% interest compounded quarterly, how much would you have to save each
month to amount to 12,000 by the time he is 18 years old?
GIVEN: F = 12,000 i = 6% m = 4
ERquarterly= ERmonthly
(1+i)m – 1 = (1+i)12 – 1
(1+ 6%/4)4 − 1 = (1 + i)12 – 1
(1+6%/4)4/12 -1 =i
i = 0.4975%
A = F (A/F, i%, n)
0.4975%
𝐴 = 12,000( )
(1 + 0.4975%)96 − 1
A = 97.82

A man bought a horse and lot worth P300, 000 in a subdivision in Metro Manila.
The annual amortization for the house and lot in P34, 000. Determine the rate of interest
he was charged by the subdivision owners.
SOLUTION:
Interest rate = 34200/300000 = 11.4

Find the annual payments to extinguish a debt of P10,000 payable in 5 years at
12% compounded annually?
GIVEN: P = 10,000 ; i = 12% ; m = 1 ; n = 5
A = P (A/P, i%, n)
12%
𝐴 = 10000 [ ]
1 − (1 + 12%)−5
A = 2,774.10
P4 – 10 (ECE Board, August 1978 and September 1984)

A man purchases a computer worth P15, 000 with interest at 5% payable semi-
annually. He signed a contract to pay P5, 000 and the balance, principal and interest
included, by equal payments at the end of each 6 months for 10 years. At the end of 4
years this computer was sold to yield the investor 7% payable semi-annually. Find the
price he paid.
GIVEN:
Product cost =P15,000
Down = P5,000
Interest = 2.5%
n = 20 years
Loan amount = product cost – down
= ₱15, 000 − ₱5, 000

= ₱10, 000
interest amount = loan amount(i)(n)
= ₱10, 000(0. 25)20

= ₱5, 000
loan amoount + interest amount
installment =
n
₱10, 000 + ₱5, 000
=
20
= ₱750
i
A=[ ]
(1 + .07)8 − 1
. 07
= 750(8)(12) [ ]
(1 + .07)8 − 1
𝐴 = ₱7, 017. 68

A man owes P10,000 with interest at 6% payable semi-annually. What equal
payments at the beginning of each 6 months for 8 years will discharge his debt
GIVEN:
A = P (A/P, i%, n)
P = 10,000
i = 6% 6%
n = 8 𝐴 = 10000 [ ]
1 − (1 + 6%)−16
m = 2
A=? A = 989.52
P4 – 12 (ECE Board, March 1981)

The P100,000 cost of an equipment was made available through a loan which
earns 12% per annum. If the loan will be paid in 10 equal annual payments, how much is
the annual installment?
GIVEN: A = P (A/P, i%, n)

P = 100,000 12%
i = 12% 𝐴 = 10000 [ ]
1 − (1 + 12%)−10
A=?
A = 17,698.42
P4 – 13 (ECE Board, October 1984)

A mechanical engineer designed a mechanical device costing P20,000.
Maintenance will cost P1,000 each year. The device will generate revenues of P5,000
each year for 5 years, after which the salvage value is expected to be P7,000. Draw the
cash flow diagram.

A father wishes to provide P4,000 for his son on his 21th birthday. How much
should he deposit every 6 months in a savings bank which pays 3% compounded semi-
1
annually, if the first deposit is made when the sons is 3 2 years old?
. 015
𝐴 = 𝑃4,000 [ ]
(1 + .015)37 − 1
𝐴 = 𝑃81.66
P4 – 15 (ME Board, March 1967)

If money is worth 12% compounded quarterly and n = 5, compute the present value
of the following.
SOLUTION:
ER (quarterly) = ER (monthly)
a.) P1.00 received monthly in year n

𝟏𝟐% 𝟒 (1 + .0099)5𝑥12 − 1
(𝟏 + ) − 𝟏 = (𝟏 + 𝒊)𝟏𝟐 − 𝟏 𝐹 = 1.00 [ ] = 𝑃81.41
𝟒 . 0099
𝟏𝟐% 𝟒 b.) P1.00 received monthly for n years
(𝟏 + )𝟏𝟐 = (𝟏 + 𝒊) 1 − (1 + .0099)−5𝑥12 − 1
𝟒 𝐹 = 1.00 [ ] = 𝑃45.08
1.009901634 – 1 = i . 0099
i = .009901634
P4 – 16 (ME Board, March 1967)

A shirt factory has just installed a boiler. It is expected that there will be no
maintenance expenses until the end of the 11th year, when ₱400 will be spent on the
boiler at the end of each successive year until the boiler is scrapped at the age of 35
years. What sum of money must be set aside this time to take care of all maintenance
expenses for the boiler.
𝐶𝐹1 𝐶𝐹1
𝑁𝑃𝑉 = 1 + ⋯+
(1 + 𝑟) (1 + 𝑟)𝑛
400 400 400
𝑁𝑃𝑉 = ( ) + ( ) + ⋯ + ( )
(1 + 0.06)11 (1 + 0.06)12 (1 + 0.06)35
𝑁𝑃𝑉 = 210.71 + 198.78 + ⋯ + 52.04
𝑁𝑃𝑉 = ₱2,850.2

A Filipino contractor in the Middle east plans to purchase a new office Building
costing P1,000,000. He agrees to pay P150,000 annually for 20 years. At the end of this
time he estimate that he can resell the building for at least P600,000. Instead of buying
the building he can lease it for P140,000 a year. All payments are to be made at the
beginning of each year and the rate of interest is 10%. Should the contractor purchase or
lease the building?

XYZ Inc. plans to construct an additional building at the end of 10 years at an
estimated cost of P5,000,000. To accumulate this amount, it will deposit equal year end
amounts in a fund earning 13%. However, at the end of the 5th year it decreases to have
a longer building estimated to cost P8,000,000. What should be the annual deposit for
the last 5 years?
P4 – 19 (ME Board, November 1983)

A computer costs P105,000. It can be leased for an annual rent of P30,000 payable
at the beginning of each year throughout its economic life of 5 years. No salvage value if
expected at the end of 5 years. Cost of capital is 10% and the applicable in rate is 40%.
Should the computer purchase or lease?
SOLUTION:

A refrigerator equipment fabricator sold an ice drop making machine with condition
that in case the machine will not be able to produce the guaranteed capacity, he will
deduct from the agreed price of the machine the loss of revenue that the buyer will incur
during the economic life of the machine which is 5 years, plus 12% cost of money. One
month after the machine was delivered the buyer complained to the fabricator that he was
not getting the guaranteed production. After a series of test it was determined that the
buyer would be costing P4,000 worth of unrealized sales per year. Assuming no increase
in operation cost if guaranteed production is attained, how much must the buyer deduct
from the agreed price of the machine?

A company manufacturing acid, upon inspection of the plant, found out that it is
badly corroded from the acid fumes and would need to be replaced, to try to get some
more life out of the roofing, the company consulted a roofing coating contractor who
presented the company with two options. The first option is a coating that will cost
P20,000 which would extend the life of the roofing for 3 years from the date of application,
and the second option will cost P30,000 and which would extend the life of the roofing for
5 years from the date of application. At what rate of return are the investment equal?
SOLUTION:

A fully secured loan of P30,000 was to be amortized by 10 equal payment semi-
annual, the first payment to be made 6 months after the loan is approved. After the 6th
payment was mae the debtor was in a position to settle the entire balance remaining by
a single payment on the date. If the interest on the loan is 12% compounded semi-
annually, what be the amount of single payment?

A machine has just been purchased for P1.2 million. It is anticipated that the
machine will be held 5 years, that it will have a salvage value of P80,000 based on current
prices, and that the annual rate of inflation during the next 5 years will be 7%. The
machine will be replaced by a duplicate and the firm will accumulate the necessary capital
by making equal year end deposits in a reserve fund that earns 6% per annum. Determine
the amount of the annual deposit.

A man agreed to pay the loan he is borrowing from a bank in six equal year end
payments of P71,477.70. Interest is 18% per annum, compounded annually, and is
included in the yearly amount he will be paying the bank. How much money is the man
borrowing from the bank?

A man wishes to purchase a set of appliances with a total cost of P20,000. He
made a down payment of P5,000 and the balance payable in 24 equal monthly
installments. If financing charge is 12% each year computed on the total balance to be
paid by installment and interest is 12%,
a.) how much would each installment payment be?

A new company developed a program in which employees will be allowed to
purchase shares of stock of the company at the end of its fifth year of operation, when
the company is thought to have gained stability, at par value of P100 per share. Believing
in the good potential of the company, an employee decided to save in a bank the amount
of P8,000 at the end of every year which will earn 9% interest, compounded annually.
How many shares will he able to purchase at the end of the fifth year?
SOLUTION:

If P10,000 is deposited each year for 9 years, how much annuity can a person get
annually from a bank every year for 8 years starting one year after the ninth deposit is
made? Money is worth 14%.

An employee earning 12,000 a month can only afford to buy a car requiring a down
payment of 10,000 and monthly amortization of not more than 30% of his monthly salary.
What would be the maximum cash value of a car he can purchased if the seller will agree
to a down payment of 10,000 and the balance payable in four years at 18% per year
payable on a monthly basis? The first payment will be due at the end of the first month.

A company has approved a car plan for its six senior officers in which the company
will shoulder 25% of the cost and the difference payable by each officer to a financing
company in 48 equal end-of-the-month installments at an interest rate of 1.5% per month.
If the cost of each car is P350,000 determine the following:

A machinery supplier is offering a certain machine on a 10% down payment and
the balance payable in equal year end payments without interest for 2 years. Under this
arrangement the price is pegged at P250,000. However, for cash purchase the machine
would only cost P195,000. What is the equivalent interest rate that is charged on the two-
year payment plan if interest is compounded quarterly?
P4 – 31
Determine the amount needed now to purchase a machine for P100,000, provide
an annual fund of P15,000 for operation and maintenance, and to replace it at the same
1
cost at the end of every ten-year period. Money is worth 72 % compounded annually.
P4 – 32
A new storage tank can be purchased and installed for P50,000 and is expected
to last for 10 years. However, an existing tank of equivalent capacity may be continued
to be used provided it is repaired. If this tank were repaired its useful life is estimated to
be done again. Assume that future costs will remain the same and that the tanks will have
no scrap value. Money is worth 10% compounded annually. How much can be spent for
repairing the existing tank if the capitalized cost of the two tank are the same?
P4 – 33
A chemical reactor, which will contain corrosive liquids, has been designed. The
reactor may be made of mild steel or stainless steel. The initial cost, including installation,
of a mild steel reactor is expected to be P72,000 and would last 5 years. Stainless steel
is more resistant to be corrosive action of the liquids, but is more expensive and will cost
P120,000. Assuming that both types of reactors will have no salvage or scrap value at
the end of their useful lives and could be replaced at the same costs as before, and if
money is worth 12% compounded annually, what should the useful life of the stainless
reactor be so that the capitalized costs are equal?
CHAPTER 5
ARITHMETIC AND GEOMETRIC GRADIENTS
P5 – 01
Compute the values of P and F
P5 – 02
Compute the values of P and F
Solution:
P5 – 03
Compute the values of X and P
Solution:
P5 – 04
For the gradient series, compute the values of P and F, and the value of A for the
equivalent uniform series.
Solution
P5 – 05
Compute the value X so that the two cash flow will be equivalent. Hint the
present or accumulated values for the cash flow should be equal.
Solution:
P5 – 06
Suppose an engineer receives an initial annual salary of P24,000 increasing at the
rate of P1,200 a year. If money is worth 12%, determine his equivalent annual salary for
a period of 10 years.
Solution:
P5 – 07
The year end operating and maintenance costs of a certain machine are estimated
to be P4,800 the first year and to increase by P800.
Solution:
P5 – 08
An inventor was offered the following alternatives as royalties for his invention:
a.) A single lump sum payment of P350,000 for the right to manufacture
the invention for the next 5 years
b.) An initial payment of P100,000 and year end payments as follows:
Solution:
P5 – 09
For the following arithmetic gradient series, with interest at 10% find:
a.) the present worth
b.) the value at the end of year 6
c.) the value at the end of year 10, assuming no further deposits after the
sixth year
d.). the equivalent uniform series for 6 years.
Solution:
P5 – 10
A machine in a factory has the following end-of-year maintenance costs:
P5 – 11
A company owes P 80,000, which includes the interest, to be paid one year from
now. To provide for the repayment of this debt, the company deposits P2, 000 at the
beginning of the first month, P4, 000 at the beginning of the second moth, increasing the
deposits in each succeeding month by P2, 000 until the beginning of the eighth month.
These amounts earn interest at the rate of 9% compounded monthly. Will the total amount
in the fund at the end of 12 months be sufficient to repay the debt? If not, how more is
needed?
P5 – 12
For the cash flow, find P and F if i = 18% per year
P5 – 13
For the cash flow, find P and F if i=18% per year.
P5 – 14
For the cash flow, find P and if i= 15%.
P5 – 15
Find the value of x in the arithmetic gradient, so that the two cash flows will be
equivalent if i = 15% per year.
P5 – 16
A man makes a series of ten annual deposits starting at P2, 000 at the end of the
first year and increasing the account deposited by 10% every year thereafter. Find the
total account on deposit in (a) 8% (b) 10% (c) 12%.
P5 – 17
A parcel of land in a downtown area, suitable for a making lot, can be leased for a
period of 10 years. Initial development costs for clearing, paving and constructing a small
office shed on the lot is estimated to be P150,000. If the net annual revenue for the first
year is P22,000 and increases by 10% per year thereafter until the tenth year, and the
improvement revert to the owner of the land at the end of 10 years, what is the rate of
return on the investment?
CHAPTER 6
FINANCING ANY ENTERPRISE
P6 – 01
A dept of ₱10,000 with interest at the rate of 8%. Paying semi-annually is to
amortized by equal payments at the end of each 6 months for 4 years. Find the semi-
annually payment and construct an amortization schedule.
GIVEN:
P = 10,000
8%
I= = 4% 𝑜𝑟 0.04
2
N = 2(4) = 8
SOLUTION:
𝐴 𝑖(1+𝑖)𝑛
A = 𝑃 (𝑃 , 𝑖%, 𝑛) = 𝑃 [(1+𝑖)𝑛−1]
0.04(1+0.04)8
A =10,000 [ (1+0.04)8−1 ]
A = 1,485.28 or ₱1,485.25
Period Principal at the Interest at Payment at the Periodic

beginning of each 4% per end of each payment to
6 months period period Principal
1 ₱10,000 ₱400 ₱1,485.28 ₱1,085.28
2 ₱8,914.72 ₱356.59 ₱1,485.28 ₱1,128.69
3 ₱7,786.03 ₱311.44 ₱1,485.28 ₱1,173.85
4 ₱6,612.19 ₱264.49 ₱1,485.28 ₱1,220.79
5 ₱5,341.4 ₱215.66 ₱1,485.28 ₱1,269.63
6 ₱4,121.78 ₱164.87 ₱1,485.28 ₱1,320.42
7 ₱2,801.37 ₱112.05 ₱1,485.28 ₱1,373.23
8 ₱1,428.15 ₱57.13 ₱1,485.28 ₱1,428.15
Total ₱47,055.64 ₱1,882.24 ₱11,882.24 ₱10,000
P6 – 02
Construct the amortization schedule for debt of ₱10,000 with interest at the rate of
19%, payable semi-annually, which is paid for, principal and interest included, by
payments of ₱2,000 at the end of 6 months for as long as necessary.
SOLUTION:
i = 19%/2 = 9.5%
Period Principal at the Interest at Payment at Periodic
beginning of each 9.4% per the end of payment to
6 months period each period Principal
1 ₱10,000 ₱950 ₱2,000 ₱1,000
2 ₱8,950 ₱850.25 ₱2,000 ₱1,149.79
3 ₱7,800.25 ₱741.02 ₱2,000 ₱1,258.98
4 ₱6,541.27 ₱621.42 ₱2,000 ₱1,378.58
5 ₱5,162.69 ₱490.46 ₱2,000 ₱1,509.54
6 ₱3,653.15 ₱347.05 ₱2,000 ₱1,652.95
7 ₱2,000.20 ₱190.02 ₱2,000 ₱1,809.98
8 ₱190.22 ₱18.07 ₱2,000 ₱1,981.93
Total ₱44,297.76 ₱4,208.32 ₱16,000 ₱11,791.71
P6 – 03
A man borrowed P10, 000 from a bank for home improvement, to be repaid by
month-end payment for 12 months. The current rate of the interest charge by banks is
19% compounded monthly. Based on this rate, prepare an amortization schedule.
GIVEN:
P = 10,000
19%
I= = 0.0158
12
n = 12
SOLUTION:
𝐴 𝑖(1+𝑖)𝑛
A = 𝑃 ( , 𝑖%, 𝑛) = 𝑃 [(1+𝑖)𝑛 ]
𝑃 −1
0.0158(1+0.0158)12
A = 10,000 [ (1+0.158)12 −1
]
A= 921.37 or ₱921.37
Period Principal at the Interest at Payment at Periodic

beginning of each 4% per the end of payment to
6 months period each period Principal
1 ₱10,000 ₱158 ₱921.37 ₱763.37
2 ₱9,263.63 ₱145.94 ₱921.37 ₱775.43
3 ₱8,461.2 ₱133.69 ₱921.37 ₱787.68
4 ₱7,673.53 ₱121.23 ₱921.37 ₱800.13
5 ₱6,873.39 ₱108.60 ₱921.37 ₱812.78
6 ₱6,060.63 ₱95.75 ₱921.37 ₱825.62
7 ₱5,235.02 ₱82.71 ₱921.37 ₱838.67
8 ₱4,396.35 ₱69.45 ₱921.37 ₱851.91
9 ₱3,533.49 ₱56.00 ₱921.37 ₱865.37
10 ₱2,679.07 ₱42.32 ₱921.37 ₱879.04
11 ₱1,800.03 ₱28.43 ₱921.37 ₱892.93
12 ₱907.4 ₱14.33 ₱921.37 ₱907.04
Total ₱66,894.40 ₱1,056.44 ₱11,076.49 ₱10,000
P6 – 04
A corporation’s floats ₱200,000 worth of ten-year callable bonds is ₱1,000 de
nominations. The bond rate is 7% compounded annually. Prepare an amortization.
GIVEN:
F = P200, 000
n= 10
i = 7%
SOLUTION:
200,000
no. of bonds = = 𝑃200 𝑏𝑜𝑛𝑑𝑠
1000
𝑖 (1 + 𝑖 )𝑛 0.07(1 + 0.07)10
𝐴=[ ] 𝐹 = [ ] 200,000 = ₱28,475.50
(1 + 𝑖 )𝑛 − 1 (1 + 0.7)10 − 1
28,475.50 − 14000 = ₱14,475.50
200,000
no. of bonds = = 𝑃200 𝑏𝑜𝑛𝑑𝑠
1000
Year PRINCIPAL INTEREST NO. OF AMOUNT YEAR END

AT 7% BONDS OF PAYMENT
RETIRED PRINCIPAL
REPAID
1 ₱200,000 ₱14,000 14 ₱14,000 ₱28,000
2 ₱186,000 ₱13,020 15 ₱15,000 ₱28,020
3 ₱171,000 ₱11,970 17 ₱17,000 ₱28,970
4 ₱154,000 ₱10,780 18 ₱18,000 ₱28,780
5 ₱136,000 ₱9,520 19 ₱19,000 ₱28,520
6 ₱117,000 ₱8,190 20 ₱20,000 ₱28,190
7 ₱97,000 ₱6,790 22 ₱22,000 ₱28,790
8 ₱75,000 ₱5,250 23 ₱23,000 ₱28,250
9 ₱52,000 ₱3,640 25 ₱25,000 ₱28,640
10 ₱27,000 ₱1,890 27 ₱27,000 ₱28,890
TOTAL ₱1.215,000 ₱85,120 200 ₱200,00 ₱285,120
P6 – 05
You purchased a ₱5,000 bond for ₱5,100. bond pays ₱200 per year. it is
redeemable for ₱5,050 after 10years what is the net rate of interest on your investment?
GIVEN:
₱5,000
₱5,100
₱200/year
₱5,050
10years
SOLUTION:
𝑐 (1+𝑖)𝑛 −1
𝑉𝑛 = 𝑛 + 𝐹𝑟 [ ]
(1+𝑖) 𝑖(1+𝑖)𝑛
5000 (1+𝑖)10 −1
𝑉𝑛 = 10 + 5,100 [ ]
(1+𝑖) 𝑖(1+𝑖)10
𝑖 = 3.85%
P6 – 06
A ₱1,000 6% bond pays dividends semi-annually and will be redeemed at 110%
on July 1, 1975. It is brought on July 1, 1973 to yield (4%, m=2). Find the price when
it was brought.
GIVEN:
₱1,000
6%
110%
4%
SOLUTION:
𝑐 (1+𝑖 )𝑛 −1
𝑉𝑛 = 𝑛
+ 𝐹𝑟 [ ]
(1+𝑖) 𝑖(1+𝑖 )𝑛
1000 (1+0.04)2 −1
𝑉𝑛 = (1+0.04)2 + 1000𝑥0.06 [0.04(1+0.04)2 ]
𝑉𝑛 = 924.556213 + 113.1656805
𝑉𝑛 = ₱1,037.721894 or ₱1,037.72
P6 – 07
A ₱10,000 debt, in the form of 100 bonds, bears 4% interest payable annually.
construct an amortization schedule for this issue by ten annual payments as nearly equal
as possible this price.
₱10,000
𝑵𝒐. 𝒐𝒇 𝒃𝒐𝒏𝒅𝒔 = = 𝟏𝟎𝟎𝒃𝒐𝒏𝒅𝒔
₱100
Year PRINCIPAL INTEREST NO. OF AMOUNT YEAR END

AT 7% BONDS OF PAYMENT
RETIRED PRINCIPAL
REPAID
1 ₱200,000 ₱400 1 ₱100 ₱500
2 ₱9,500 ₱380 3 ₱300 ₱680
3 ₱8,820 ₱352.8 5 ₱500 ₱852.8
4 ₱8,467.2 ₱338.69 7 ₱700 ₱1,038.69
5 ₱7,428.5 ₱297.14 10 ₱1000 ₱1,297.14
6 ₱6,131.36 ₱245.25 11 ₱1100 ₱1,345.25
7 ₱4,786.11 ₱191.44 12 ₱1200 ₱1,391.44
8 ₱3,394.67 ₱135.79 15 ₱1500 ₱1,635.79
9 ₱1,758.98 ₱70.36 16 ₱1600 ₱1,670.36
10 ₱87.64 ₱3.51 20 ₱2000 ₱2,003.51
TOTAL ₱60,374.45 ₱2414.98 100 ₱10,000 ₱10,614.96
P6 – 08
₱1,000 6% bond which will mature in 10 years and with a bond rate at 8% payable
annually is to be redeemed at the part at the end of the period. It is sold for ₱1030.
Determine the yield at this price.
GIVEN:
₱1,000
610%
8%
₱1070
SOLUTION:
Assume I = 7%
𝑐 (1+𝑖)𝑛 −1
𝑉𝑛 = + 𝐹𝑟 [ ]
(1+𝑖)𝑛 𝑖(1+𝑖)𝑛
1000 (1+0.08)10 −1
𝑉𝑛 = + 1000𝑥0.08 [ ]
(1+0.08)10 0.08(1+0.08)10
𝑉𝑛 = ₱508.35 + ₱561.89
𝑉𝑛 = ₱1,070.24
Since ₱1,070 is greater than ₱1,030, Therefore i = 7%
P6 – 09
A man was offered a land bank certificate with face value of ₱100,000 with bear
interest of 8% per year payable semi-annually due in 6 years. If the man wants to earn
6% semi-annually, how much must he pay for the certificate?
GIVEN:
P = 10,000
8%
i= = 4% 𝑜𝑟 0.04
2
n = 2(4) = 8
SOLUTION:
𝐴
P = 𝐹 (𝑃 , 𝑖%, 𝑛) + 𝐶 (1 + 𝑖 )−𝑛
1−(1+0.03)−12
P = 4,000 [ ] + 100,000(1 + 0,003)−12
0.03
P = ₱39,816.01597 + ₱70,137.98802
P = ₱109,954.004

Bes 4 Term Requirement

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Bes 4 Term Requirement

Uploaded by

Copyright:

Available Formats

Republic of the Philippines

Northwest Samar State University

COLLEGE OF ENGINEERING AND ARCHITECTURE

1ST SEMESTER 2021-2122

P2 – 01 (C.E. Board, January 1924)

P2 – 02 (C.E. Board, February 1953)

A. Additional number of men in order to complete the work on time.

To complete the work on time project duration = 30 days needed

B. Solve for total cost of the project when completed in 50days

P2 – 03 (C.E. Board, November 1982)

Analyze the following cases:

Amount payed for overtime = (40×12.5×20×10) × 40 = P28000

Extra worker added = 100 – 60 = 40

(60 × 8 × 50) (𝑃2 × 10 × 30)

Extra men added: 80 – 60 = 20 to maintain ratio add 21 workers (7 unskilled + 14

Therefore, net saving = 44800 + 40000 – 28350 – 28350 = P32930

P2 – 04 (ECE Board, February 1979)

P2 – 05 (EE Board, April 1984)

At the end of 3 weeks, the work is 60% complete

As per the work progress

According to Revised Work Schedule

P2 – 06 (ME Board, October 1986)

P2 – 07 (ME Board, April 1987)

GIVEN: 1 oz/ton ; P1500/ton = 90% ; P1200/ton = 80% ;

P2 – 08 (ME Board, October 1987)

GIVEN: 130 tons/24hour ; 45 tons

Difference of two bricks:

P2 – 09 (ME Board, April 1988)

P2 – 10 (ME Board, October 1988)

GIVEN: 80% ; 60%

P2 – 11 (ME Board, October 1988)

P3 – 01 (ECE Board, February 1975)

P3 – 02 (ECE Board, February 1976)

P3 – 03 (ECE Board, February 1978)

P3 – 04 (ECE Board, February 1979)

P3 – 05 (ECE Board, August 1979)

P3 – 06 (ECE Board, August 1982)

P3 – 07 (ECE Board, September 1982)

P3 – 08 (ECE Board, September 1983)

P3 – 09 (ME Board, September 1979)

Given: P = P500 i = 7% F = 2, 000

P3 – 10 (ME Board, October 1986)

P3 – 11 (ME Board, 1987)

Given: P = 26, 000 i = (8%)/4 = 2%

P3 – 10 (ME Board, October 1986)

Solution: b.) P = P300, 000 i = 20% F = F (1+i) n = P300,000 (1+20%) 5 F = P

P3 – 13 (ME Board, April 1989)

P3 – 14 (ME Board, June 1990)

P3 – 15 (Geodetic Engineering Board, August 1980 and February 1982)

P4 – 01 (Ch.E. Board, November 1982)

Effective interest rate = (1+0.004922)^12

P4 – 02 (CE Board, November 1978)

Using equivalent (reduced) cash flow:

The dam will pay for itself in 4.5 years.

P4 – 03 (CE Board, April 1981)

P4 – 04 (CE Board, October 1981)

P4 – 02 (ECE Board, February 1975)

P4 – 06 (ECE Board, February 1975)

P4 – 02 (ECE Board, February 1975)

P4 – 08 (ECE Board, August 1977)

P4 – 09 (ECE Board, August 1978)

GIVEN: P = 10,000 ; i = 12% ; m = 1 ; n = 5

P4 – 10 (ECE Board, August 1978 and September 1984)