Econ 223- Problem Sets

1. What is the ordinary interest on P1,500.50 for 182 days at 5.2%?

A. P39.01 B. P39.82 C. P39.45 D. P39.99
2. A loan for P50,000 is to be paid in 3 years at the amount of
P65,000. What is the effective rate of money?
A. 9.01% B. 9.14% C. 9.31% D. 9.41%
3. What is the effective rate corresponding to 18% compounded
daily? Take 1 year is equal to 360 days.
A. 19.61% B. 19.44 % C. 19.31 % D. 19.72 %
4. What rate of interest compounded annually is the same as the
rate of interest of 8% compounded quarterly?
A. 8.07% B. 8.12 % C. 8.16 % D. 8.24 %
5. Which of these gives the lowest effective rate of interest?
A. 12.35% compounded annually C. 11.90% compounded annually
B. 12.20% compounded annually D. 11.60% compounded annually
6. An amount of P1,000 becomes P1,608.44 after 4 years compounded
bimonthly. Find the nominal interest.
A. 11.89% B. 12.00% C. 12.08% D. 12.32%
7. How long will it take money to double itself if invested at 5%
compounded annually?
A. 13.7 years B. 14.7 years C. 14.2 years D. 15.3 years
8. By the condition of a will, the sum of P20,000 is left to a girl
to be held in trust fund by her guardian until it amounts to
P50,000. When will the girl receive the money if fund invested at
8% compounded quarterly?
A. 11.23 years B. 11.46 years C. 11.57 years D. 11.87 years
9. A sum of P1,000 is invested now and left for eight years, at
which time the principal is withdrawn. The interest has accrued is
left for another eight years. If the effective annual interest rate
is 5%, what will be the withdrawal amount at the end of the 16th
year?
A. P693.12 B. P700.12 C. P702.15 D. P705.42
10. Mandarin Bank advertises 9.5% account that yields 9.84%
annually. Find how often the interest is compounded.
A. Monthly B. Bimonthly C. Quarterly D. Annually
11. A student plans to deposit P1,500 in the bank now and another
P3,000 for the next 2 years. If he plans to withdraw P5,000 three
years from after his last deposit for the purpose of buying shoes,
what will be the amount of money left in the bank after one year of
his withdrawal? Effective annual interest rate is 10%.
A. P1,549.64 B. P1,459.64 C. P1,345.98 D. P1,945.64
12. You borrow P3,500.00 for one year from a friend at an interest
rate of 1.5% per month instead of taking a loan from a bank at a
rate of 18% per year. How much lesser you will pay by borrowing the
money from the bank?
A. P 62.44 B. P44.55 C. P54.66 D. P37.56
13. What is the present worth of two P 100 payments at the end of
the third year and fourth year? The annual interest rate is 8%.
A. P 150.56 B. P 152.88 C. P 153.89 D. P 151.09
14. A firm borrows P2,000 for 6 years at 8%. At the end of 6 years,
it renews the loan for the amount due plus P2,000 more for 2 years
at 8%. What is the lump sum due?
A. P 3,260.34 B. P 3,280.34 C. P 3,270.34 D. P 3,250.34
15. In year zero, you invest P 10,000.00 in a 15% security for 5
years. During that time, the average annual inflation is 6%. How
much in terms of year zero pesos will be in the account at
maturity?
A. P15,030.03 B. P20,113.57 C. P18,289.05 D. P16,892.34
16.4,000 is borrowed for 75 days at 16% per annum simple interest
How much will be due at the end of 75 days?
A. 4,133.33 B. P 4,333.33 C. 4,166.67 D. 4,150.00 ·
17. A deposit of P 110,000 was made for 31 days. The net interest
after deducting 20% withholding tax is P 890.36. Find the rate of
return annually.
A. 11.95% B. 12.75% C. 11.75% D.12.225%
18. If you borrowed money from your friend with simple interest of
12%, find the present worth of P 50,000, which is due at the end of
7 months.
A. P 46,200 B. P 44,893 C. P 46,730 D. P 45,789
19. A bank charges 12 % simple interest on a P 300.00 loan: How
much will be repaid if the loan is paid back in one lump sum after
three years?
A. P 408.00 B. P415.00 C. P 551.00 D. P 450.00
20. The effective rate of 14% compounded semi-annually is
A. 14.49% B. 12.36% C. 14.94% D. 14.88%
21. 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. 15.7% D. 21.81%
22. The amount of P 12,800 in 4 years at 5 % compounded quarterly
is
A. P 14,785.34 B. P 15,614.59 C. P 16,311.26 D. P 15,847.33
23. A bank pays one percent interest on savings accounts four times
a year. The effective annual interest rate is?
A. 4.06% B. 1.00% C. 2.04% D. 3.36%
24. What will be the future worth of money after 12 months, if the
sum of P 25,000 is invested today at simple interest rate of 1% per
month?
A. P 30,000 B. P 29,000 C. P 28,000 D. P 27,859
25. Mandarin Bank advertises 9.5 % account that yields 9.84 %
annually. Find how often the interest is compounded.
A. Daily · B. Monthly C. Bi-monthly D. Quarterly
26. How long in years will it take money to quadruple if it earns
7% compounded semi-annually?
A. 20.15 B. 26.30 C. 33.15 D. 40.30
27. If P 5,000.00 shall accumulate for 10 years at 8 % compounded
quarterly, find the compounded interest at the end of 10 years.
A. P 6,005.30 B. P 6,000.00 C. P 6,040.20 D. P 6,010.20
28. What is the present worth of two P 1 00 payments at the end of
the third year and fourth year? The annual interest rate is 8%.
A. P 153 B. P 160 C. P 162 D. P 127
29. At an interest rate of 10% compounded annually, how much will a
deposit of P 1,500 be in 15 years? ·
A. P 6,100.0 B. P 6,234.09 C. P 6,265.87 D. P 6,437.90
30. A man expects to receive P 25,000 in 8 years. How much is that
money worth now considering interest at 8% compounded quarterly?
A. P13,859.12 B. P13,958.33 C. P13,675.23 D. P13,265.83
31. If you borrowed money from your friend with simple interest of
12%, find the present worth of P 50,000, which is due at the end of
7 months.
A. P 46,200 B. P 44,893 C. P 46,730 D. P 45,789
32. A man purchased on monthly installment a P 100,000 worth of
land. The interest rate is 12 % nominal and payable in 20 years.
What is the monthly amortization?
A. P 1,101.08 B. P 1,121.01 C. P 1,152.15 D. P 1,128.12
33. Money Borrowed today is to be paid in 6 equal payments at the
end of 6 quarters. If the interest is 12% compounded quarterly. How
much was initially borrowed if quarterly payment is P 2000.00?
A. P 10,834.38 B. P 10,382.90 C. P 10,586.99 D. P 10,200
34. What is the accumulated amount of five year annuity paying P
6,000 at the end of each 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
35. A debt of P 10,000 with 10 % interest compounded semi-annually
is to be amortized by semi-annual payment over the next 5 years.
The first due in 6 months. Determine the semi-annual payment?
A. P 1,200.00 B. P 1,295.05 C. P 1,193.90 D. P 1,400.45
36. 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
37. A company invests P 10,000 today to be repaid is 5 years in one
lump sum at 12 % compounded annually. How much profit in present
day pesos is realized?
A. P 7,632 B. P 7,236 C. P 7,326 D. P 7,362
38. Find the present worth of future payment of P 100,000 to be
made in 10 years with an interest of 1.2% compounded quarterly.
A P 30,444.44 B. P 33,000.00 C. P 30,655.68 D. P 30,546.01
What is the present worth of a P500 annuity starting at the end of
the third year and continuing to the end of the fourth year, if the
annual interest rate is 10 %?
A. P 727.17 B. P 717.17 C. P 714.71 D. P 731.17
39. What annuity is required over 12 years to equate with a future
amount of P 20,000? Assume i= 6% annually.
A. P 1,290.34 B. P 1,185.54 C. P 1,107.34 D. P 1,205.74
40. A factory operator bought a diesel generator set for P
10,000.00 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 2,500.57 B. P 2,544.45 C. P 2,540.56 D. P 2,504.57
41. What is the present worth of a year annuity paying P 3,000.00
at the end of each year, with interest at 8% compounded annually?
A. P 7,654.04 B. P 7,731.29 C. P 7,420.89 D. P 7,590.12
42. A man loans P 187,400 from a bank with interest at 5%
compounded annually. He agrees to pay his obligations by paying 8
equal annual payments, the first being due at the end of 10 years.
Find the annual payments.
A. P 43,600.10 B. P 43,489.47 C. P 43,263.91 D. P 43,763.20
43. A time deposit of P110,000 for 31days earns P890.39 on maturity
date after deducting the 20% withholding tax on interest income.
Find interest per annum.
A. 12.5% B. 11.95% C. 12.25% D. 11.75%
44. A bank charges 12% simple interest on a P300.00 loan. How much
will be repaid if the loan is paid back in one lump sum after three
years.
A. P 408.00 B. P 551.00 C. P415.00 D. P450.00
45. A tag price of a certain commodity is for 100 days. If paid in
31 days, there is 3%discount. What is the simple interest paid?
A. 12.5% B. 6.25% C. 22.32% D. 16.14%
46. Accumulate P5,000.00 for 10 years at 8% compounded quarterly.
A. P 12,456.20 B. P 13,876.50 C. P10,345.80 D. P11,040.20
47. Accumulate P5,000.00 for 10 years at 8% compounded semi-
annually.
A. P 10,955.61 B. P 10,233.67 C. P9,455.67 D. P11,876.34
48. Accumulate P5,000.00 for 10 years at 8% compounded monthly
A. P 15,456.75 B. P 11,102.61 C. P10,955.61 D. P10,955.61
49. Accumulate P5,000.00 for 10 years at 8% compounded annually.
A. P 10,794.62 B. P 8,567.97 C. P10,987.90 D. P7,876.87
50. How long it will take P1,000 to amount to P1,346 if invested at
6% compounded quarterly.
A. 3 years B. 4 years C. 5 years D. 6 years
51. How long will it take for an investment to double its amount if
invested at an interest rate of 6% compounded bi-monthly
A. 10 years B. 12 years C. 13 years D. 14 years
52. If the compound interest on P3,000.00 in years is P500.00 then
the compound interest on P3,000.00 in 4 years is:
A. P 956.00 B. P 1,083.00 C. P1,125.00 D. P1,526.00
53. If P1000 accumulates to P1500 when invested at a simple
interest for three years, what is the rate of interest?
A. 14.12% C. 15.89%
B. 16.67 % D. 16.97 %
54. What will be the future worth of money after 12 months, if the
sum of p 25,000 is invested today at simple interest rate of 1% per
month?
A. 28,000 C. 28,289
B. 28,165 D. 28,250
55. If 10,000 is borrowed for 75 days at 16% per annum simple
interest. How much will be due at the end of 75 days?
A. 5,060.67 C. 5,133.33
B. 5,050.00 D. 5,166.67
56. If you borrow money from your friend with simple interest of
12%, find the present worth of P 20,000, which is due at the end of
nine months?
A.18,992.08 C. 18,782.18
B.18,348.62 D. 18,120.45
58. What nominal rate compounded semi-annually, yields the same
amount as 16% compounded quarterly?
A.16.09% C. 16.32%
B.16.45% D. 16.78%
59. A man borrowed money from a loan shark. He receives from the
roan shark and amount of p 1342.00 and promised to repay p 1,500.00
at the end of 3 quarters. What is the simple interest rate?
A. 15.47% C. 15.69%
B. 15.80% D. 15.96%
60. Mr. J Dela Cruz borrowed money from a bank. He receives from
the bank and 1,340 and promised to pay 1,500 at the end of 9
months. Determine the corresponding discount rate or often.
A. 13.15% C. 13.46%
B. 13.32% D. 13.73%
61. About how many years will 100,000 earn a compound interest of
50,000 if the interest rate is 9% compounded quarterly?
A. 4 years C. 5 years
B. 6 years D. 7 years
62. By the condition of the will, the sum of 20,000 is left to a
girl to be held be in trust fund by her guardian until it amounts
to 50,000, when will the girl receive the money if the fund is
invested at 8% compounded quarterly?
A. 11.23 years C. 11.57 years
B. 11.34 years D. 11.87 years
63. If 5,000 shall accumulate for 10 years at 4% compounded
quarterly, find the compounded interest at the end of 10 years?
A. P 2,333.33 C. P 2,555.43
B. P 2,444,42 D. P 2,666.34
64. A firm borrows of 2,000 for 6 years at 8% at the end of 6
years, it renews the loan due plus 2,000 more for 2 years at 8%.
What is the total of future worth?
A. 3,260.34 C. 3,250.44
B. 3,280.44 D. 3,270.44
65. If P1000 accumulates to P1500 when invested at a simple
interest for three years, what is the rate of interest?
A. 14.12% C. 15.89%
B. 16.67 % D. 16.97 %
66. What will be the future worth of money after 12 months, if the
sum of p 25,000 is invested today at simple interest rate of 1% per
month?
A. 28,000 C. 28,289
B. 28,165 D. 28,250
67. A firm borrows of 2,000 for 6 years at 8% at the end of 6
years, it renews the loan due plus 2,000 more for 2 years at 8%.
What is the total of future worth?
A. 3,260.34 C. 3,250.44
B. 3,280.44 D. 3,270.44
68. When will an account be tripled with an interest of 11.56%?
A. 10.04 years C. 9.45 years
B. 11.03 years D. 12.45 years
69. Find the compound amount and interest if Php 2500.00 is
invested at 8% compounded quarterly for 5 years and 6 months?
A. 4,232.2 C. 3,632.32
B. 3,864.95 D. 2,993.22
70. The exact simple interest of 5000.00 invested from June 21 1995
to December 25, 1995 is 100,000. What is the rate of interest?
A. 4.3% C. 3.9%
B. 2.9% D. 3.2%
71.) Ariel takes a loan of P8,000 to buy a used truck at the rate
of 9 % simple Interest. Calculate the annual interest to be paid
for the loan amount.
A. P 720 B. P 820 C. P 722 D. P 822
72.) A loan of P5,000 is made for a period of 15 months, at a
simple interest rate of 15% what future amount is due at the end of
the loan period
A. P 5,937.50 B. P 5,837.50 C. P 5,637.50 D. P 5,937.50
73.) What is the interest due on a P 1500 note for 4 years and 3
months, if it bears 12% ordinary simple interest?
A. P 795 B. P 765 C. P 785 D. P 756
74.) A total of P1,200 is invested at a simple interest rate of 6%
for 4 months. How much interest is earned on this investment?
A P 21 B. P 23 C. P 22 D. P 24
75.) Find the simple interest on P10,000 at the rate of 5% for 5
years. Also find the total amount after this time.
A. P 12,500 B. P 12,300 C. P 13,500 D. P 13,300
76.Ten years later, she sold this statue for P750. If the statue is
viewed as an investment, what annual rate did she earn?
A. 0.0524 B. 0.0425 C. 0.0542 D. 0.0515
77.) How many years will it take for an investment to double in
value if it earns 5% compounded annually?
A. 12.2 years B. 13.2 C. 14.2 years D. 15.2
78.) Find the compound amount and compound interest on the
principal P20,000 borrowed at 6% compounded annually for 3 years.
A. P 381 B. P 3820.32 C. P 3281.32 D. P 3720.32