This is the Multiples Choice Questions Part 6 of the Series in Engineering Economics as one of the General Engineering and Applied Sciences (GEAS) topic. In Preparation for the ECE Board Exam make sure to expose yourself and familiarize in each and every questions compiled here taken from various sources including past Board Questions in General Engineering and Applied Sciences (GEAS), Engineering Economy Books, Journals and other Engineering Economy References.

### Online Questions and Answers in Engineering Economics Series

Following is the list of multiple choice questions in this brand new series:

**Engineering Economics MCQs**

**MCQs from Number 1 – 50**Answer key:

**PART I**

**MCQs from Number 51 – 100**Answer key:

**PART II**

**MCQs from Number 101 – 150**Answer key:

**PART III**

**MCQs from Number 151 – 200**Answer key:

**PART IV**

**MCQs from Number 201 – 250**Answer key:

**PART V**

**MCQs from Number 251 – 300**Answer key:

**PART VI**

**MCQs from Number 301 – 350**Answer key:

**PART VII**

**MCQs from Number 351 – 400**Answer key:

**PART VIII**

**MCQs from Number 401 – 450**Answer key:

**PART IX**

**MCQs from Number 451 – 500**Answer key:

**PART X**

### Continue Practice Exam Test Questions Part VI of the Series

**Choose the letter of the best answer in each questions.**

251. A price tag of P1200 is specified if paid within 60 days but offers a 3% discount for cash in 30 days. Find the rate of interest.

- A. 37.11%
- B. 40.21%
- C. 38.51%
- D. 39.31%

252. It is the practice of almost all bank in the Philippines that when they grant a loan, the interest for 1 year is automatically deducted from the principal amount upon release of money to a borrower. Let us therefore assume that you applied for a loan with the bank and the P80000 was approved at an interest rate of 14% of which P11200 was deducted and you were given ac check of P68800. Since you have to pay the amount of P80000 one year after, what then will be the effective interest rate?

- A. 16.28%
- B. 17.30%
- C. 38.51%
- D. 39.31%

253. Mr. J. Dela Cruz borrowed money from the bank. He received from the bank P1,340.00 and promised to pay P1,500.00 at the end of 9 months. Determine the simple interest rate and the corresponding discount rate or often referred to as the “Banker’s Discount”.

- A. 15.92% ; 13.73%
- B. 12.95% ; 17.33%
- C.18.28% ; 13.12%
- D. 19.25% ; 13.33%

254. A man borrowed from the bank under a promissory note that he signed in the amount of P25000.00 for a period of 1year. He received only the amount of P21,915.00 after the bank collected the advance interest and an additional amount of P85.00 for notarial and inspection fees. What was the rate of interest that the bank collected in advance?

- A. 13.64%
- B. 16.43%
- C.18.37%
- D. 10.32%

255. Karen was granted a loan of P20,000 by her employer CPM Industrial Fabricator and Construction Corporation with an interest at 6% for 180days on the principal collected in advance. The corporation would accept a promissory note for P20,000 non-interest for 180days. If discounted at once, find the proceeds in the note.

- A. P18,800
- B. P18,000
- C. P19,000
- D. P18,400

256. P4000 is borrowed for 75 days at 16% per annum simple interest. How much will be due at the end of 75 days?

- A. P4186.43
- B. P4133.33
- C. P5124.54
- D. P5625.43

257. Mr. Bautista made a money market placement of P1,000,000 for 30 days at 7.5% per year. If withholding tax is 20%, what is the net interest that Mr. Bautista will receive at the end of the month?

- A. P3,000
- B. P6,000
- C. P4,000
- D. P5,000

258. A bill for motorboat specifies the cost as P1,200 due at the end of 100days but offers a 4% discount for cash in 30days. What is the highest rate, simple interest at which the buyer can afford to borrow money in order to take advantage of the discount?

- A. 18.4%
- B. 20.9%
- C. 19.6%
- D. 21.4%

259. In buying a computer disk, the buyer was offered the options of paying P250 cash at the end of 30days or P270 at the end of 120days. At what rate is the buyer paying simple interest if he agree to pay at the end of 120days?

- A. 32%
- B. 28%
- C.40%
- D. 25%

260. On March 1, 1996 Mr. Sarmiento obtains a loan of P1500 from Mr. Avila and signs a note promising to pay the principal and accumulated simple interest at the rate of 5% at the end of 120days. On May 15, 1996, Mr. Avila discounts the note at the bank whose discount rate is 6%. What does he receive?

- A. P2,201.48
- B. P1,513.56
- C. P1,123.29
- D. P938.20

261. A deposit of P110,000 was made for 31days. The net interest after deducting 20% withholding tax is P890.36. Find the rate of return annually.

- A. 12.25
- B. 12.75
- C. 11.75
- D. 11.95

262. If you borrowed money from your friend with simple interest of 12%, find the present worth of P50,000 which is due at the end of 7months.

- A. P46,200
- B. P46,729
- C. P44,893
- D. P45,789

263. A man borrowed P2000 from a bank and promise to pay the amount for 1year. He received only the amount of P1,920 after the bank collected an advance interest of P80. What was the rate of discount and the rate of interest that the bank collected in advance?

- A. 4% ; 4.17%
- B. 4% ; 4.71%
- C. 3% ; 3.17%
- D. 3% ; 3.71%

264. An engineer promised to pay P36,000 at the end of 90days. He was offered a 10% discount if he pays in 30 days. Find the rate of interest.

- A. 64.6%
- B. 66.6%
- C. 65.6%
- D. 67.6%

265. A man is required to pay P200 at the end of 160 days or P190 at the end of 40 days. Determine the rate of interest.

- A. 18.4%
- B. 15.8%
- C. 19.6%
- D. 16.4%

266. Compute the discount if P2000 is discounted for 6 months at 8% simple interest.

- A. P29.67
- B. P76.92
- C. P67.29
- D. P92.76

267. The amount of P12800 in 4years at 5% compounded quarterly is _____.

- A. P14,785.34
- B. P16,311.26
- C. P15,614.59
- D. P15,847.33

268. A man borrows money from a bank which uses a simple discount rate of 14%. He signs a promissory note promising to pay P500.00 per month at the end of 4th, 6th, and 7th month respectively. Determine the amount of money that he received from the bank.

- A. P1403.68
- B. P1102.37
- C. P1340.38
- D. P1030.28

269. A nominal interest of 3% compounded continuously is given on the account. What is the accumulated amount of P10,000 after 10 years?

- A. P13,610.10
- B. P13,498.60
- C. P13,500.10
- D. P13,439.16

270. BY the condition of a will, the sum of P2000 is left to a girl to be held in trust fund by her guardian until it amount to P50000.00. When will the girl receive the money of the fund is invested at 8% compounded quarterly?

- A. 7.98 years
- B. 11.57 years
- C. 10.34 years
- D. 10.45 years

271. A man expects to receive P25,000 in 8 years. How much is that worth now considering interest at 8% compounded quarterly?

- A. P13,859.12
- B. P13,675.23
- C. P13,958.33
- D. P13,265.83

272. P500,000 was deposited at an interest of 6% compounded quarterly. Compute the compound interest after 4 years and 9 months.

- A. P163,475.37
- B. P158,270.37
- C. P178,362.37
- D. P183,327.37

273. If the nominal interest rate is 3%, how much is P5000 worth in 10 years in a continuously compounded account?

- A. P5750
- B. P7500
- C. P6750
- D. P6350

274. P200,000 was deposited for a period of 4 years and 6 months and bears on interest of P85649.25. What is the rate of interest if it is compounded quarterly?

- A. 8%
- B. 7%
- C. 6%
- D. 5%

275. How many years will P100,000 earn a compound interest of P50,000 if the interest rate is 9% compounded quarterly?

- A. 3.25 years
- B. 5.86 years
- C. 4.55 years
- D. 2.11 years

276. A certain amount was deposited 5 years and 9 months ago at an interest of 8% compounded quarterly. If the sum now is P315,379.85, how much was the amount deposited?

- A. P200,000
- B. P240,000
- C. P180,000
- D. P260,000

For **Problems 277-279:**

When compounded Bi-monthly, P15000 becomes P22,318.30 after 5years.

277. What is the nominal rate of interest?

- A. 7%
- B. 9%
- C. 8%
- D. 10%

278. What is the equivalent rate if it is compounded quarterly?

- A. 7.03%
- B. 9.03%
- C. 8.03%
- D. 10.03%

279. What is the effective rate if it is compounded quarterly?

- A. 7.28%
- B. 9.28%
- C. 8.28%
- D. 10.28%

280. How will it take a money to double itself if invested at 5% compounded annually?

- A. 12.2 years
- B. 14.2 years
- C. 13.2 years
- D. 15.2years

281. Compute the effective annual interest rate which is equivalent to 5% nominal annual interest compounded continuously.

- A. 5.13%
- B. 5.26%
- C. 4.94%
- D. 4.90%

282. Find the time required for a sum of money to triple itself at 5% per annum compounded continuously.

- A. 21.97 years
- B. 18.23 years
- C. 25.34 years
- D. 23.36 years

283. A man wishes to have P40,000 in a certain fund at the end of 8 years. How much should he invest in a fund that will pay 6% compounded continuously?

- A. P24,751.34
- B. P28,864.36
- C. P36,421.44
- D. P30,468.42

284. If the effective annual interest rate is 4%, compute the equivalent nominal annual interest compounded continuously.

- A. 3.92%
- B. 3.80%
- C. 4.10%
- D. 4.09%

285. What is the nominal rate of interest compounded continuously for 10 years if the compound amount factor is equal to 1.34986?

- A. 3%
- B. 5%
- C. 4%
- D. 6%

286. American Express Corp. charges 1.5% interest per month, compounded continuously on the unpaid balance purchases made on this credit card. Compute the effective rate of interest.

- A. 19.72%
- B. 21.20%
- C. 20.25%
- D. 19.90%

287. If the nominal interest is 12% compounded continuously, compute the effective annual rate if interest.

- A. 12.75%
- B. 12.40%
- C. 11.26%
- D. 11.55%

288. Compute the difference in the future amount of P500 compounded annually at nominal rate of 5% and if it is compounded continuously for 5 years at the same rate.

- A. P3.87
- B. P5.48
- C. P4.21
- D. P6.25

289. If the effective rate is 24%, what nominal rate of interest is charged for a continuously compounded loan?

- A. 21.51%
- B. 23.25%
- C. 22.35%
- D. 21.90%

290. What is the nominal rate of interest compounded continuously for 8 years if the present worth factor is equal to 0.6187835?

- A. 4%
- B. 6%
- C. 5%
- D. 7%

291. What is the difference of the amount 3 years from now for a 10% simple interest and 10% compound interest per year? (P5000 accumulated)

- A. P155
- B. same
- C. P100
- D. P50

292. Find the discount if P2,000 is discounted for 6 months at 8% compounded quarterly.

- A. P76.92
- B. P77.66
- C. P80.00
- D. P78.42

293. If a sum of money triples in a certain period of time at a given rate interest, compute the value of the single payment present worth factor.

- A. 0.333
- B. 0.292
- C. 3.000
- D. 1.962

294. If the single payment amount factor for a period of 5 years is 1.33822. What is the nearest value of the interest rate?

- A. 8%
- B. 5%
- D. 7%
- D. 6%

295. If the single payment present worth factor for a period of 8 years is equal to 0.58201, compute the nearest value of the rate of interest for that period.

- A. 6%
- B. 5%
- C. 7%
- D. 8%

296. If money is worth 8% compounded quarterly, compute the single payment amount factor for a period of 6 years.

- A. 1.60844
- B. 1.70241
- C. 0.62172
- D. 0.53162

297. A sum of P1,000 is invested now and left for 8 years, at which time the principal is withdrawn. The interest has an accrued left for another 8 years. If the effective annual interest is 5%, what will be the withdrawn amount at the end of the 16th year?

- A. P507.42
- B. P750.42
- C. P705.42
- D. P425.07

For **problems 298 – 300:**

Compute the interest for an amount of P200,000 for a period of 8 years.

298. If it was made at a simple interest rate of 16% .

- A. P274,000
- B. P256,000
- C. P265,000
- D. P247,000

299. If it was made at 16% compounded bi-monthly.

- A. P507,267.28
- B. P407,283.01
- C. P507,365.96
- D. P459,923.44

300. If it was made at 16% compounded continuously.

- A. P422,462.64
- B. P524,242.46
- C. P507,233.24
- D. P519,327.95