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Econ Midterm Assignment 2

The document is an assignment for the course Econ 2301 – Engineering Economics, detailing 15 problems related to simple and compound interest calculations. Students are instructed to solve these problems, provide cash flow diagrams, and present their final answers rounded to two decimal places. The assignment is to be written on Long Bond Paper and includes various scenarios involving loans, deposits, and future worth calculations.

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26 views1 page

Econ Midterm Assignment 2

The document is an assignment for the course Econ 2301 – Engineering Economics, detailing 15 problems related to simple and compound interest calculations. Students are instructed to solve these problems, provide cash flow diagrams, and present their final answers rounded to two decimal places. The assignment is to be written on Long Bond Paper and includes various scenarios involving loans, deposits, and future worth calculations.

Uploaded by

carljohngregorio1
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Department of MECHANICAL ENGINEERING

Academic Year 2024 – 2025 | Summer Term


Econ 2301 – Engineering Economics Set A ⃝ B ⃝
Midterm – Assignment #2

Name: Year/Block: Date/Time


Instruction. Solve the following problems neatly and box your final answer. Round your final answer to two
decimal places. Write your assignment in Long Bond Paper. For each of the compound interest problem, draw
the cash flow diagram.

1. A bank charges 12% simple interest on a P300 loan. How much will be repaid if the load is paid back in
one lump sum after three years?

2. A P4,000 is borrowed for 75 days at 16% per annum simple interest. How much will be due at the end of
75 days?

3. A bank loan of P2,000 was made at 8% simple interest. How long would it take in years for the amount
of the loan and interest equal to P3,280?

4. A bank deposit of P4,000 was made one year ago in one of the local banks which pays monthly interest.
The bank account accumulates now to P4,392.6. Compute the monthly interest rate and the effective
annual interest rate.

5. A loan was made 3 years and 4 months at 6% simple interest. The principal amount of the loan has just
been repaid along with P800 interest. Compute the principal amount of the original loan.

6. What will be the future worth of money after 12 months, if the sum of P25,000 is invested today at simple
interest rate of 1% monthly?

7. A loan of P5,000 is made for a period of 450 days. If the future amount of the loan at the end of the loan
period is P5,937.5, what is the interest rate for the ordinary and exact simple interest?

8. Find the present value of installment payments of P1,000 now, P2,000 at the end of the first year, P3,000
at the end of the second year, P4,000 at the end of third year and P5,000 at the end of fourth year. Money
is worth 10% compounded annually.

9. Find the present worth of a future payment of P100,000 to be made in 10 years with an interest of 12%
compounded quarterly.

10. If the sum P15,000 is deposited in an account earning 4% compounded quarterly, what will be the
deposited amount at the end of 5 years?

11. Five years ago, you paid P34,000 for a house. If you sold it today for P50,000, what would be your annual
rate of appreciation?

12. If P1,000 becomes P1,126.49 after 4 years when invested at a certain nominal rate of interest
compounded semi-annually, determine the nominal rate and the corresponding effective rate.

13. One thousand five hundred was deposited in a bank account 20 years ago. Today, it is worth P3,000.
Interest is paid semi-annually. Determine the interest rate paid on this account.

14. P200,000 was deposited on January 1, 2009 at an interest rate of 24% compounded semi-annually. How
much would the sum be on January 1, 2014?

15. How much should you put into a 10% savings account compounding annually in order to have P10,000
in five years?

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