Republic of the Philippines
CAVITE STATE UNIVERSITY
Don Severino de las Alas Campus
Indang, Cavite
COLLEGE OF ENGINEERING AND INFORMATION TECHNOLOGY
Department of Civil Engineering
Please remember to put your name, section, student number and the date at the top of your
paper. Scan your paper properly. Work all problems using BLACK PEN on ANY bond paper.
Your writing should be NEAT and LEGIBLE. All answers should be compiled and uploaded in a
single pdf file.
File name format:
Subject Code_Problem Set 1_Student Number.pdf
Problem Set No. 1
INSTRUCTIONS: Copy the problems and solve completely. Use x = last 2 digit of student
number. Given below are answers for x = 00.
Example: Student Number – 201110267
x = 67
Value – 15000+100(x)
Value to be used – 21700
1. What is the annual rate of interest if P265+(x) is earned in four months in an investment of
P15,000+10(x)?
Ans. 5.3%
2. A loan of P2,000 is made for a period of 13 months from January 1 to January 31 the following year,
( )
at a simple interest rate of 20+ %. What future amount is due at the end of the loan period?
Ans. P2433.33
3. If you borrow money from your friend with simple interest of 12%, find the present worth of
P20,000+1000(x), which is due at the end of 9 months.
Ans. P18348.62
4. Determine the exact simple interest on P5,000+100(x) for the period from January 15 to November
28, 1992, if the rate is 22%.
Ans. P955.74
5. A man wishes his son to receive P200,000+50(x) ten years from now. What amount should he invest
if it will earn interest of 10% compounded annually during the first 5 years and 12 % compounded
quarterly during the next 5 years?
Ans. P68758.67
6. By the conditions of a will, a sum of P25,000+20(x) is left to a girl to be held in trust by her guardian
until it amounts to P45,000+20(x). When will the girl receive the money if the fund is invested at 8%
compounded quarterly?
Ans.7.42 years
7. At a certain interest rate compounded semi-annually, P5,000 will amount to P20,000+100(x) after 10
years. What is the amount at the end of 15 years?
Ans. P40,029.72
8. Jones Corporation borrowed P9,000+10(x) on January 1, 1978 and P12,000 on January 1, 1980.
Jones Corporation made a partial payment of P7,000+10(x) on January 1, 1981. It was agreed that
the balance of the loan would be amortized by two payments, one of January 1,1982 and the other
one on January 1, 1983, the second being 50% larger than the first. If the interest rate is 12%, what
is the amount of each payment?
Ans. P9136.91; 13,705.36
9. A woman borrowed P3000+10(x) to be paid after 1.5 years with interest at 12 % compounded
semiannually and P5,000+10(x) to be paid at 12% compounded monthly. What single payment must
she pay after 3.5 years at an interest rate of 16% compounded quarterly to settle the two
obligations?
Ans. P12627.59
Republic of the Philippines
CAVITE STATE UNIVERSITY
Don Severino de las Alas Campus
Indang, Cavite
COLLEGE OF ENGINEERING AND INFORMATION TECHNOLOGY
Department of Civil Engineering
10.Mr. Juan dela Cruz borrowed money from a bank. He received from the bank P1,342+(x) and
promise to repay P1,500 at the end of 9 months. Determine the simple interest rate and
corresponding discount rate or often referred to as the “Banker’s Discount”.
Ans. 11.7%; 10.53%
( )
11.A man deposits P50000+100(x) in a bank account at 6+ % compounded monthly for 5 years. If the
( )
inflation rate of 6.5+ % per year continues for this period, will this effectively protect the purchasing
power of the original principal?
Ans. No; P49, 225
12.What is the future worth of P600+(x) deposited at the end of every month for 4 years if the interest
rate is 12% compounded quarterly?
Ans. P36,641
13.A young woman, 22 years old, has just graduated from college. She accepts a good job and desires
to establish her own retirement fund. At the end of each year thereafter, she plans to deposit
P2000+100(x) in a fund at 15% annual interest. How old will she be when the fund has an
accumulated value of P1,000,000?
Ans. 53 years old
14.Mr. Reyes borrows P600,000+50(x) at 12% compounded annually, agreeing to repay the loan in 15
equal annual payments. How much of the original principal is still unpaid after he has made the 8th
payment?
Ans. P402,040
15.M purchased a small lot in a subdivision paying P200,000 downpayment and promising to pay
P15000+10(x) every 3 months for the next 10 years. The seller figured interest at 12% compounded
quarterly
(a) What was the cash price of the lot?
(b) If M missed the 2 first payments, what must he pay at the time the 12th is due to bring himself up to
date?
(c) After making 8 payments, M wished to discharge his remaining indebtedness by a single payment at
the time when the 9th regular payment was due. What must he pay in addition to the regular
payment then due?
(d) If M missed the first 10 payments, what must he pay when the 11th payment is due to discharge his
entire indebtedness?
Ans. (a)P546,722; (b)P234,270; (c)P300,006; (d)P479,948
16.A man approaches the ABC Loan Agency for P100,000 to be paid in 24 monthly installments. The
agency advertises an interest rate of 1.5% per month. They proceed to calculate the amount of his
monthly payment in the following manner.
Amount requested P100,000
Credit Investigation 500
Credit risk insurance 1000
Total P101,500
Interest : (P101,500)(24)(0.015) = P36,540
Total owed : P101,500+P36540 = P138,040
,
Payment = = PP5,751.67
What is the effective rate of interest of the loan?
Ans: 38.83%
17.A new office building was constructed 5 years ago by a consulting engineering firm. At that time the
firm obtained the bank loan for P10,000,000+1000(x) with a 20% annual interest rate compounded
quarterly. The terms of the loan called for equal quarterly payments for a 10 year period with the
right of prepayment at any time without penalty.
Due to internal charges in the firm, it is now proposed to refinance the loan through an insurance
company. The new loan is planned for a 20 year term with an interest rate of 24% per annum
compounded quarterly. The insurance company has one time service charge of 5 % of the balance.
This new loan also calls for equal quarterly payments.
Republic of the Philippines
CAVITE STATE UNIVERSITY
Don Severino de las Alas Campus
Indang, Cavite
COLLEGE OF ENGINEERING AND INFORMATION TECHNOLOGY
Department of Civil Engineering
(a) What is the Balance due on the original mortgage (principal) if all payments have been made through
a full five years?
(b) What will be the difference between the equal quarterly payments in the existing arrangement and
the revised proposal?
Ans: (a)P7,262.733 (b) 120,862
18.An asphalt road requires no upkeep until the end of 2 years when P60,000+(x) will be needed for
repairs. After this, P90,000+(x) will be needed for repairs at the end of each year for the next 5
years, then P120,000+(x) at the end of each year for the next 5 years. If money is worth 14%
compounded annually, what was the equivalent uniform annual cost for 12 year period?
Ans. P79,245
19.A man wishes to provide a fund for his retirement such that from his 60th to 70th birthdays he will be
able to withdraw equal sums P18,000+10(x) for his yearly expenses. He invests equal amount for
his 41st to 59th birthdays in a fund earning 10% compounded annually. How much should each of
these amounts be?
Ans. P2,285
20.Juan Reyes inherited P280,000+100(x) on his birthday. This he placed in his own pension fund
(bank account), which earns interest at 12% compounded annually. He withdraw P450,000 on his
35th birthday to make the initial payment on a house. He drew his annual uniform payment for the
pension fund on his 65th birthday and planned to make 20 such withdrawals so as to just exhaust
the fund. He died at the age of 71, however, just before withdrawing the amount on that amount due
on that date. How much is left in the fund to be passed on to the heirs at the time of Juan’s death?
Ans. P1,155,980
21.Determine the present worth and the accumulated amount of an annuity consisting of 6 payments of
P120,000+100(x) each, the payments are made at the beginning of each year. Money is worth 15%
compounded annually.
Ans. P52,226.40; P120,801.60
22.Calculate the capitalized cost of a project that has an initial cost of P3,000,000 and an additional
investment of P1,000,000 at the end of every ten years. The annual operating cost will be P100,000
at the end of every year for the first four years and P160,000 thereafter. In addition, there is
( )
expected to be a recurring major rework cost of P300,000 every 13 years. Assume i=15+ %
Ans. P4,281,990
23.The will of a wealthy philanthropist left P5,000,000 to establish a perpetual charitable foundation. The
foundation trustees decided to spend P1,200,000 to provide facilities immediately and to provide
( )
P100,000 of capital replacement at the end of each 5 year period. If the invested earned 12+ %
per annum, what would be the year-end amount available in perpetuity from the endowment for
charitable purposes?
Ans. P440,259
24.The surface area of a certain plant that requires painting is 8,000 sq.ft. Two kinds of paint are
available whose brands are A and B. Paint A costs P1.40 per sq.ft. but needs renewal at the end of
every 4 years, while paint B costs P1.80 per sq.ft. If money is worth 12% effective, how often should
paint B be renewed so that it will be as economical as Paint A?
Ans. 5.58 years
25.A contract has been signed to lease a building at P200,000+100(x) per year with an annual increase
of P1,500 for 8 years. Payments are to be made at the end of each year, starting one year from
now. The prevailing interest rate is 7%. What lumpsum amount paid today would be equivalent to
the 8-year lease payment plan?
Ans. P147,609
