1. The tag price of a certain commodity is for 100 days. If paid in 1.

1. The tag price of a certain commodity is for 100 days. If paid in

31 days, there is a 3% discount. What is the simple interest paid? 31 days, there is a 3% discount. What is the simple interest paid?
2. Determine the ordinary and exact simple interest on P5000 2. Determine the ordinary and exact simple interest on P5000
invested for the period from January 15, 1996 to October 12, invested for the period from January 15, 1996 to October 12,
2005 with the rate of 18%. 2005 with the rate of 18%.
3. Which of the following has the greatest effective rate? 3. Which of the following has the greatest effective rate?
a. 12.31 % compounded quarterly a. 12.31 % compounded quarterly
b. 12.20 % compounded monthly b. 12.20 % compounded monthly
c. 12.35 % compounded annually c. 12.35 % compounded annually
d. 12.32 % compounded semi-annually d. 12.32 % compounded semi-annually
4. Find the effective rate on a nominal rate of 8.5% compounded 4. Find the effective rate on a nominal rate of 8.5% compounded
continuously. continuously.
5. A house and lot costing P2 million was bought at a down 5. A house and lot costing P2 million was bought at a down
payment of P500,000 and P1 million after one year. The payment of P500,000 and P1 million after one year. The
remaining balance will be paid at the end of the third year. If the remaining balance will be paid at the end of the third year. If the
interest rate is 24% compounded semi-annually, what is the interest rate is 24% compounded semi-annually, what is the
required payment? required payment?
6. At what interest rate, compounded quarterly, will an investment 6. At what interest rate, compounded quarterly, will an investment
double in five years? double in five years?
7. East Side Bank offers the following effective rates on 5-year 7. East Side Bank offers the following effective rates on 5-year
loans;8% for the first two years, 10% for the third year, 11% for loans;8% for the first two years, 10% for the third year, 11% for
the fourth year, and 12% on the fifth year. If P500,000.00 is the fourth year, and 12% on the fifth year. If P500,000.00 is
borrowed, determine the lump-sum amount to be paid at the end borrowed, determine the lump-sum amount to be paid at the end
of the loan period. of the loan period.
8. The president of a growing engineering firm wishes to give each 8. The president of a growing engineering firm wishes to give each
of 50 employees a holiday bonus. How much is needed to invest of 50 employees a holiday bonus. How much is needed to invest
monthly for a year at 12% nominal interest rate, compounded monthly for a year at 12% nominal interest rate, compounded
monthly, so that each employee will receive P1,000.00 bonus? monthly, so that each employee will receive P1,000.00 bonus?
9. A parent on the day that child is born wishes to determine what 9. A parent on the day that child is born wishes to determine what
lump-sum would have to be paid into an account bearing interest lump-sum would have to be paid into an account bearing interest
at 5% compounded annually, in order to withdraw P20,000.00 at 5% compounded annually, in order to withdraw P20,000.00
each on the child’s 18th, 19th, 20th, and 21st birthdays? each on the child’s 18th, 19th, 20th, and 21st birthdays?
10. An engineer wishes to take out a P150,000.00 educational policy 10. An engineer wishes to take out a P150,000.00 educational policy
for his son, if money is worth 14% effective, find the premiums for his son, if money is worth 14% effective, find the premiums
to be paid if a) five yearly b) 20 quarterly payments are needed. to be paid if a) five yearly b) 20 quarterly payments are needed.
11. An individual makes five deposits that increase uniformly by 11. An individual makes five deposits that increase uniformly by
P300.00 every month in a savings account that earns 12% P300.00 every month in a savings account that earns 12%
interest compounded monthly. If the initial deposit is P4,500.00. interest compounded monthly. If the initial deposit is P4,500.00.
Determine the accumulated amount in the account just after the Determine the accumulated amount in the account just after the
last deposit. last deposit.
12. An engineer bought an equipment for P500,000. Other expenses, 12. An engineer bought an equipment for P500,000. Other expenses,
including installation, amounted to P30,000. At the end of its including installation, amounted to P30,000. At the end of its
estimated useful life of 10 years, the salvage value will be 10% estimated useful life of 10 years, the salvage value will be 10%
of the first cost. Using the straight-line method of depreciation, of the first cost. Using the straight-line method of depreciation,
what is the book value after 5 years? what is the book value after 5 years?
13. A machine costing P480,000 has a life expectancy of 12 years 13. A machine costing P480,000 has a life expectancy of 12 years
with a salvage value of 10% of the first cost. What is the book with a salvage value of 10% of the first cost. What is the book
value after five years using the declining balance method? value after five years using the declining balance method?
14. An equipment having a first cost of P450,000 has a life 14. An equipment having a first cost of P450,000 has a life
expectancy of 10 years with a final salvage value of P80,000. expectancy of 10 years with a final salvage value of P80,000.
Using the double-declining balance method, what is its book Using the double-declining balance method, what is its book
value after 6 years? value after 6 years?
15. A machine having a total first cost of P100,000 has a salvage 15. A machine having a total first cost of P100,000 has a salvage
cost of P10,000 after 10 years. Determine the book value after cost of P10,000 after 10 years. Determine the book value after
five years using the double-declining balance method. five years using the double-declining balance method.
16. The cost of producing an item is as follows: 16. The cost of producing an item is as follows:
Labor cost per unit = P315.00 Labor cost per unit = P315.00
Material cost per unit = P100.00 Material cost per unit = P100.00
Variable cost per unit = P3.00 Variable cost per unit = P3.00
Monthly overhead cost = P461,600.00 Monthly overhead cost = P461,600.00
If each unit is sold at P995.00, how many units must be If each unit is sold at P995.00, how many units must be
produced each month to break-even? produced each month to break-even?
17. The cost of producing a commodity consists of P65.00 per unit 17. The cost of producing a commodity consists of P65.00 per unit
for labor and material cost and P25.00 per unit for other variable for labor and material cost and P25.00 per unit for other variable
cost. The fixed cost per month amounts to P700,000. If the cost. The fixed cost per month amounts to P700,000. If the
commodity is sold at P290.00 each, what is the break-even commodity is sold at P290.00 each, what is the break-even
quantity? quantity?