Problem Statement: CHAPTER 2 Interest and Money-Time Relationship
Solved Supplementary Problem 2.17A new office building was constructed 5 years ago by a consulting engineering firm. At that time the firm obtained the bank loan for P 10,000,000 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 any time without penalty.
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Due to internal changes 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 a onetime service charge 5% of the balance. This new loan also calls for equal quarterly payments.
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?
Problem Answer:
a.) The balance due on the original mortgage (principal) is P7,262,747.029.
b.) The difference between the equal quarterly payments is P120,862.
View Solution:
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List of Engineering Economy Supplementary Problems by Sta. Maria
- Solution: What is the balance due on the original mortgage (principal)
- Solution: What is the effective rate of interest of the loan?
- Solution: M purchased a small lot in a subdivision, paying P200,000 down and promising to pay P15,000
- Solution: How much of the original principal is still unpaid after he has made the 8th payment?
- Solution: How old will she be when the fund has an accumulated value of P1,000,000?
- Solution: What is the future worth of P600 deposited at the end of every month?
- Solution: If the inflation rate of 6.5% per year continues for this period
- Solution: Determine the simple interest rate and the corresponding discount rate
- Solution: What single payment must she pay after 3.5 years?
- Solution: What is the amount of each payment?
- Solution: What is the amount at the end of 15 years?
- Solution: When will the girl receive the money if the fund is invested at 8%
- Solution: What amount should he invest if it will earn interest of 10%
- Solution: Determine the exact simple interest on P5,000
- Solution: Find the present worth of P20,000 which is due at the end of nine months
- Solution: What is the future amount is due at the end of the loan period?
- Solution: What is the annual rate of interest if P265 is earned in four months
Latest Problem Solving in Engineering Economics
- Solution: Find the total amount donated during the 6 years
- Solution: How much money will be in the account in 3 years?
- Solution: Find the nominal rate of interest, the effective rate of interest,
- Solution: Compute its interest if it is invested at 10% compounded continuously
- Solution: Compute for its compound interest if it is invested at 10% compounded annually
- Solution: Compute its interest at the end of 3 years if it is invested at 10% simple interest
- Solution: How long would it take your money to double itself
- Solution: How long would it take in years if it was made at 8% compounded quarterly
- Solution: What is the equivalent nominal rate if it is compounded semi-quarterly?
- Solution: What is the actual rate of interest?
- Solution: What is the nominal rate of interest if it is compounded quarterly?
- Solution: What is the value of the present worth factor
- Solution: What is the value of the compound amount factor
- Solution: What is the effective rate if it is compounded continuously?
- Solution: What is the value of (F/P, 8%, 6) if it is compounded semi-quarterly
- Solution: What is the nominal rate of interest?
- Solution: What is the value of (P/F, 6%, 4) if it is compounded bi-monthly
- Solution: How long would it take in years for the amount of the loan and interest to equal P3280
- Solution: What is the single payment compound amount factor for 8% compounded bi-monthly for 5 years
- Solution: Compute the nominal rate for a period of 6 years for an effective rate of 8.33%
- Solution: Find the value of y, (P/F,6%,y) if P/F compounded bi-monthly is equal to 0.787566
- Solution: What is the effective rate if it is compounded quarterly?
- Solution: What is the equivalent rate if it is compounded quarterly?
- Solution: What is the nominal rate of interest?
- Solution: Find the value of x, (F/P, x, 6) if F/P compounded quarterly is equal to 1.612226
- Solution: Determine the simple interest rate and the corresponding discount rate
- Solution: Determine the amount of money that he received from the bank
- Solution: What will be the withdrawn amount at the end of the 16th year?
- Solution: Compute the single payment amount factor for a period of 6 years
- Solution: Compute the discount if P2000 is discounted for 6 months at 8% simple interest
- Solution: Find the rate of interest if compound amount factor compounded bi-monthly
- Solution: If it was made at 16% compounded continuously
- Solution: If it was made at 16% compounded bi-monthly
- Solution: If it was made at a simple interest rate of 16%
- Solution: Compute the nearest value of the rate of interest for that period
- Solution: What is the nearest value of the interest rate?
- Solution: What was the rate of interest that the bank collected in advance?
- Solution: Compute the value of the single payment present worth factor
- Solution: Find the discount if P2,000 is discounted for 6 months at 8% compounded quarterly
- Solution: What is the difference of the amount 3 years from now for a 10% simple interest
- Solution: Determine the rate of interest
- Solution: What is the nominal rate of interest compounded continuously for 10 years
- Solution: Compute the equivalent nominal annual interest compounded continuously
- Solution: How much should he invest in a fund that will pay 6% compounded continuously?
- Solution: Find the time required for a sum of money to triple itself
- Solution: Compute the effective annual interest rate which is equivalent to 5% nominal
- Solution: How much is P5000 worth in 10 years in a continuously compounded account?
- Solution: Compute the compound interest after 4 years and 9 months
- Solution: How much is that worth now considering interest at 8% compounded quarterly?
- Solution: Compute the effective rate of interest
- Solution: Compute the effective annual rate if interest
- Solution: Compute the difference in the future amount of P500 compounded annually
- Solution: What nominal rate of interest is charged for a continuously compounded loan?
- Solution: What is the nominal rate of interest compounded continuously for 8 years
- Solution: Find the rate of interest
- Solution: What is the rate of interest if it is compounded quarterly?
- Solution: How many years will P100,000 earn a compound interest of P50,000
- Solution: If the sum now is P315,379.85, how much was the amount deposited?
- Solution: How will it take a money to double itself if invested at 5% compounded annually?
- Solution: What is the net interest that Mr. Bautista will receive at the end of the month?
- Solution: When will the girl receive the money of the fund if invested at 8% compounded quarterly?
- Solution: What does he receive?
- Solution: What is the highest rate, simple interest at which the buyer can afford
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- Solution: Find the rate of interest
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- Solution: At what rate is the buyer paying simple interest if he agree to pay at the end of 120 days?
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- Solution: Find the price of the bond
- Solution: What is the depletion charge during the year
- Solution: How many units must be manufactured each month
- Solution: Determine the length of cable run in feet
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- Solution: What is its book value after 8 years using straight line method?
- Solution: How much is in the account at the end of the 4th year?
- Solution: What is the present worth of a year annuity paying P 3,000.00
- Solution: What will be its selling price after 5 years?
- Solution: What will be the withdrawal amount at the end of the 16th year?
- Solution: What will be the amount of money left in the bank after one year of his withdrawal?
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- Solution: What is the annual payment?
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- Solution: What is the present worth of two P 100 payments at the end of the third year and fourth year?
- Solution: How much lesser you will pay by borrowing the money from the bank?
- Solution: When will the girl receive the money if the fund is invested at 8%
- Solution: When will the girl receive the money if fund invested at 8% compounded quarterly?
- Solution: How long will it take money to double if it is invested at 5% compounded continuously
- Solution: How long will it take money to double itself if invested at 5%
- Solution: Find the nominal interest
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- Solution: What is the effective rate of money?
- Solution: What is the rate of interest?
- Solution: What is the ordinary interest on P1,500.50 for 182 days at 5.2%?
- Solution: What minimum rate of return, before payment of taxes
- Solution: Find the proceeds of the note
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- Solution: What was the rate of discount?
- Solution: What future amount is due at the end of the loan period?
- Solution: Determine the rate of simple interest
- Solution: What is the actual rate of interest?
- Solution: How much will be his new gain in percent?
- Solution: Determine the percent of sales is their profit after taxes?
- Solution: How many months will Mr. Camus be able to recover the cost
- Solution: Determine the rate of return on the total investment
- Solution: What must be the resale price to justify the investment
- Solution: What is the balance due on the original mortgage (principal)
- Solution: What is the effective rate of interest of the loan?
- Solution: M purchased a small lot in a subdivision, paying P200,000 down and promising to pay P15,000
- Solution: How much of the original principal is still unpaid after he has made the 8th payment?
- Solution: How old will she be when the fund has an accumulated value of P1,000,000?
- Solution: What is the future worth of P600 deposited at the end of every month?
- Solution: If the inflation rate of 6.5% per year continues for this period
- Solution: Determine the simple interest rate and the corresponding discount rate
- Solution: What single payment must she pay after 3.5 years?
- Solution: What is the amount of each payment?
- Solution: What is the amount at the end of 15 years?
- Solution: When will the girl receive the money if the fund is invested at 8%
- Solution: What amount should he invest if it will earn interest of 10%
- Solution: Determine the exact simple interest on P5,000
- Solution: Find the present worth of P20,000 which is due at the end of nine months
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- Solution: How much is needed to invest monthly for a year?
- Solution: If the monthly installment was P42,821.87, find the value of x?
- Solution: What is the approximate rate of return (ROR) on the investment?
- Solution: What is the annual rate of return on investment for the project?
- Solution: What is the amount he would need to deposit now?
- Solution: How much is the lump sum amount?
- Solution: How much is this lump sum if the cost of money is 14% compounded quarterly?
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- Solution: What does Mr. Ayala pay each month?
- Solution: What is her yearly amortization if all payments are to be made at the beginning of each year?
- Solution: Find the annual payments of P187,400 loan from a bank with interest at 5% compounded annually
- Solution: What is the present value of the investment if the rate of interest is 12% compounded semi-annually?
- Solution: How much must you invest today in order to withdraw P2,000 annually for 10 years?
- Solution: How much must you pay monthly to amortize the loan within a period of 10 years?
- Solution: What is the amount that will be available in two years?
- Solution: What does he have to pay at the end of the fifth year in order to pay off his loan?
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- Solution: What is the monthly amortization?
- Solution: What is the present worth of two P100 payments?
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- Solution: Approximately how much money will be in the account after 10 years?
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