MODULE 1 PRACTICE TASK
2023-2024/2nd EECO102 ENGINEERING ECONOMY N/A
SY/TERM COURSE CODE COURSE TITLE SET
1. A ₱250,000 loan was to be repaid with 8% simple annual interest. A total of ₱267,500 was paid.
How many months was the loan outstanding? ANS: 10.5 months
2. What sum of money now is equivalent to ₱123,750 two years hence, if interest is 4% per 6-month
period? ANS: ₱105,782.02
3. A principal of ₱50,000 was invested on January 3, 2022 at a simple interest rate of 8%. Determine
the total amount that the investor can withdraw on April 3, 2022 using both exact and ordinary
simple interest. ANS: ₱50,986.30; ₱51,000
4. A sum of money will be received 6 years from now. At 5% annual interest, the present worth is
₱60,000. At the same interest rate, what would be the value in 10 years?
5. Traffic at a certain intersection is currently 2,000 cars per day. A consultant has told the city that
traffic is expected to grow at a continuous rate of 5% per year for the next 4 years. How much
traffic will be expected at the end of 2 years? ANS: 2,211 cars/day
6. What effective interest rate per annum corresponds to a nominal rate of 12% compounded
monthly? ANS: 12.68%
7. What interest rate, compounded quarterly, is equivalent to a 9.31% effective interest rate? ANS:
9%
8. How long will it take for ₱10,000, invested at 5% per year, compounded continuously, to triple in
value? ANS: 21.97 years
9. Select the best alternative among the following five alternatives. Assume the investment is for a
period of 4 years and P = ₱120,000. ANS: Choose Alternative 2
a. 11.98% compounded continuously
b. 12.00% compounded daily
c. 12.01% compounded monthly
d. 12.02% compounded quarterly
e. 12.03% compounded yearly
10. Anna borrowed ₱3,000 from the bank and promised to pay the amount for one year. She only
received an amount of ₱2,900 after the bank collected an advance interest of ₱100. What was the
rate of discount and the interest rate that the bank collected in advance? ANS: 3.33%; 3.45%
11. A report shows that in the last 5 years, prices have increased a total of 50%. This is equivalent to
what annual inflation rate, compounded annually? ANS: 8.45%
12. An economist predicted that there will be a 5.5% per year inflation of prices during the next 10
years. If this proves to be correct, how much will an item that presently sells for ₱300 bring a
decade hence? ANS: ₱512.44
13. Lucky Pearson recently found out that his grandfather has passed away and left him his savings
account. The account was originally opened 50 years ago when his grandfather deposited
₱35,000. He had not added nor subtracted from the account since then. If the account has earned
an average rate of 10% per year and inflation has been 4% per year, answer the following:
a. How much money is currently in the account? ANS: ₱4,108,679.85
b. Express the answer in terms of the purchasing power of money from 50 years ago. ANS:
₱578,143.09
Prepared by: Engr. Joshua V. Moscoso Page 1 of 1
