Simple Interest 8. In the previous problem, what is the 18.

A man paid 10% as down payment of Inflation

1. If a man borrowed money from his effective rate? P200,000 for a house and lot and agreed 1. In 1960, the average value of a house
girlfriend with simple 9. What is then the equivalent nominal to pay the balance on monthly is P300,000. In 2010, the average value of
interest rate of 12%, determine the interest rate if compounded monthly? installments for 5 years at an interest rate the house of the same model is
present worth of P74, 900.00, which due 10. How many years are required for P of 15%, compounded monthly. What was P2,132,000. What was the rate of
at the end of seven months. 1,000 to increase to P 2,000 if invested at the monthly installment in pesos? inflation of the house?
2. Clara has invested P 10,000.00, part at 9% per year compounded continuously? 19. Money is worth 8% compounded 2. In year zero, you invest P 100,000.00 in
5% and the remainder at 10% simple 11. What payment X ten years from now annually. For a uniform series of a 15% security for 10 years. During that
interest. How much is invested at higher is equivalent to a payment of P 1,000 six payments, what would be its capital time, the average annual inflation is 6%.
rate if the total annual interest from this years from now, if interest is 15% recovery factor for a period of 6 years? How much in terms of year zero pesos
investment is P 950.00? compounded monthly? 20. An investor deposits P10,000 at the will be in the account at maturity?
3. Determine the accumulated amount 12. An investment of P3M earns interest end of each year in an account which 3. A P2,000 in 2 years has an average
using exact simple interest on P of 9% compounded gives a nominal annual interest of 5%, inflation rate of 6% and the real interest
10,000.00 for the period from January continuously. What is the effective rate of compounded continuously. How much rate of money is 10%. Determine the
20, 1990 to November 28 of the same interest? sum will he accumulate in 10 years? inflation-adjusted interest rate.
year at 15% interest rate. 13. What rate in percent compounded Gradient Series 4. A company invests P10,000.00 today to
4. You owe P120,000 from a friend and monthly is equivalent to 18% 21. A certain machine purchased today be repaid in 5 years in one lump sum at
promise to pay 6% simple interest. How compounded semi-annually? shall be paid in 3 annual unequal 12% compounded annually. If the rate of
much will you pay at the end of 9 14. When compounded bi-monthly, payments with no down payment. If the inflation is 3% compounded annually,
months? How about at the end of 1 year P150,000 becomes P223,183 after 5 company agrees that the first payment is how much profit is relieved over 5 years?
and 6 moths? years. What is the nominal rate of P120,000 at the end of the first year and 5. If the cost of money is 9% and the
5. A price tag of P150,000 is payable in 60 interest? you have to increase that payment by inflation rate is 5%, what interest rate will
days. A 3% discount is offered if paid in 30 Annuity P30,000 per year for the next remaining take care of the cost of money and
days. What is the rate of simple interest? 15. If P500.00 is invested at the end of years until the end of the 3rd year, how inflation?
6. A man borrowed from a bank under a each year for 6 years at an annual interest much is the present worth of the Depreciation
promissory note that he signed in the rate of 7%, what is the total peso amount machine if the company charges 12% 6. A 30 hp sand mill cost P410,000.
amount of P60,000 for a period of one upon the deposit of the sixth payment? annual interest? Salvage value of the mill is estimated to
year. He received only P50,150 after the 16. If P500.00 is deposited in an account 22. Annual deposits were made in the be P60,000 after 20 years. Find the
bank collected the advanced interest and at the beginning of each year for 6 years fund earning10% per annum. The first appraisal or book value of the sand mill
an additional amount of P850 for notarial at an annual interest rate of 7%, how deposit was 2,000 and each deposit using straight line depreciation method
and inspection fees. What was the rate of much can thereafter was 200 less than the after 10 years.
simple interest that the bank collected in be withdrawn after 6 years? preceding one. Determine the amount in 7. A dump truck was bought for P300,000
advance? 17. A fund is to provide an annual the fund after sixth deposit. six years ago. It will have a salvage value
Compound Interest scholarship at P4,000 for the first 5 years; 23. Annual maintenance costs for a of P30,000 four years from now.
7. If the sum of P 12,000 is deposited in P6,000 for the next 5 years and P9,000 machine are P1,500 this year and Determine the present value of the dump
an account earning interest rate of 9% thereafter. The fund will be established 1 estimated to increase 10% each year truck if the depreciation method used is
compounded quarterly, what will it year before the first scholarship is every year. What is the present worth of sinking fund at 6%?
become after 1 year? awarded. If the fund earns 12% interest, the maintenance costs for 4 years if i = 8. An asset is purchased for P9,000. Its
what sum must be deposited? 8%? estimated life is 10 years, after which it
will be sold for P1,000. Find the book 14. A machine costing P280,000 has a
value at the end of third year if sum-of- useful life of 20000 hours at the end of
the-year’s digit method (SOYDM) which its salvage value is P30,000. In the
depreciation is used. first year, it was used for 2080 hours, in
9. RI purchased new 3D projectors with a the second year, 3160 hrs. Find the book
total worth of P618,000. If the value at the end of the second year.
equipment is depreciated over an eight- 15. A machine has a first cost of P73500
year period with salvage value of 5%, and a salvage value of P3500 at the end
determine the depreciation charge of its useful life of 8 years. Evaluate the
during the fifth year using declining depreciation of the machine at during
balance method. the 5th year using the Matheson’s
10. In the previous problem, determine method.
the depreciation charge during the fifth 16. A dump truck was bought for P30,000
year using double declining balance six years ago. It will have a salvage value
method. of P3,000 four years from now. It is sold
11. A property is purchased at P 100,000 now for P8,000. What is its sunk cost (a
with a salvage value of 10% of the original cost that cannot be recovered due to
cost after 8 years of service. If during the certain reason) if the depreciation
first 4 years of service it produces 100 method used is sinking fund at 6%?
units per year and 80 units each year for Situation - A machine is purchased at
the remaining years. What will be the P10200 with an expected salvage value of
book value after 5 years of service using P1,200 at the end of its economic life of 8
service output method? years. If money is worth 6% per annum,
12. A cement mixer costs P45,000 with an determine the book value of the machine
estimated life of 5 years. Its salvage value at the end of 4 years using;
is P2,500. Find its yearly depreciation 17. Straight line method;
charge using sinking fund method at 18. SOYD method;
8.5%. 19. Matheson’s method;
13. A coin making machine costing 20. DDB method; and
P200,000 has a salvage value of P20,000 21. Sinking Fund method.
at the end of its economic life of five
years. The schedule of production is as
follows:
Year No. of coins Year No. of Coins
1 100,000 4 40,000
2 80,000 5 20,000
3 60,000
Determine the annual reserve for
depreciation for the 2nd year only