Problem Statement: Engineering Economics
Compound Interest Problem SolvingThe institute of Electronics and Communications Engineers of the Philippines (IECEP) is planning to put up its own building. Two proposals being considered are:
This offer has expired!
A. The construction of the building now to cost P 400,000
B. The construction of a smaller building now to cost P300,000 and at the end of 5 years, an extension to be added to cost P 200,000.
By how much is proposal B more economical than proposal A if interest rate is 20% and depreciation to be neglected?
A. P 19,122.15
B. P 19,423.69
C. P 19,518.03
D. P 19,624.49
Problem Answer:
The proposal B is more economical than proposal A byP 19,624.49.
View Solution:
This content is for Premium Member. Tired of ads?
Subscribe To Unlock The Content! and Remove Ads.
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
- Solution: What then will be the effective interest rate?
- Solution: Find the rate of interest
- Solution: The amount of P12,800 in 4 years at 5% compounded quarterly is
- Solution: What is the accumulated amount of P10,000 after 10 years?
- Solution: Find the rate of return annually
- Solution: What was the rate of discount and the rate of interest
- Solution: At what rate is the buyer paying simple interest if he agree to pay at the end of 120 days?
- Solution: Annuity is required over 10 years to equate to a future amount of P 15,000
- Solution: Determine how long will it take before a building costing P 3,000,000 can be built?
- Solution: What is the value of the money after 25 years
- Solution: What should be the amount of each payment?
- Solution: What is the interest due on a P 1500 note for 4 years and 3 months
- Solution: What is the rate of interest of this investment?
- Solution: What does he have to pay at the end of the fifth year in order to pay off his loan?
- Solution: Determine the length of service life necessary
- Solution: What is the rate of interest of this investment?
- 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
- Solution: What is the maximum production time per unit in hours required
- Solution: How many pairs must be produced each month for the manufacturer to break-even?
- Solution: Find the depreciation in the first three years using sum-of-years digit method
- 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?
- Solution: How much in terms of year zero pesos will be in the account at maturity?
- Solution: By how much is proposal B more economical than proposal A
- Solution: What annuity is required over 12 years to equate with a future amount of P 20,000?
- Solution: What is the annual payment?
- Solution: What is the present worth of a P500 annuity starting at the end of the third year
- 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
- Solution: What rate of interest compounded annually is the same as
- Solution: What is the effective rate corresponding to 18% compounded daily?
- 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
- Solution: What then will be the effective interest rate?
- 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
- 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
- Solution: What is the number of motors that must be sold each month to break even?
- Solution: How many cases must be sold each year for XYZ Corporation
- Solution: Find the number of units to be forged to break even
- Compute for the number of blocks of ice to sell per month
- How many units must be produced and sold per month to breakeven?
- What is the manufacturer’s break-even sales volume in drums per year?
- How many number of units must be manufactured each month?
- Find the number of units to be forged to break-even.
- Determine the capital recovery rate per year of a company
- How much could the corporation afford to pay for another type of truck?
- Solution: Find the capitalized cost of a bridge whose cost is P250 M and life is 20 years
- Solution: What is the approximate present worth of maintenance for the machine?
- Solution: Find the book value during the first year using sum-of-year’s digit (SYD)
- Solution: Determine the depreciation cost during the 5th year using SYD.
- Solution: What is the depreciation in the third year of an asset for P10,000.00?
- Solution: Determine the length of service life necessary of the new equipment
- Solution: Find the annual rate of depreciation of the machine in percentage
- Solution: What is the annual rate of depreciation of the machine in percentage?
- Solution: Calculate the annual depreciation cost by sinking-fund method at 4% interest
- Solution: Find the book value after 5 years using straight line depreciation?
- Solution: What is the total depreciation in the first three years using straight-line method?
- Solution: Determine the book value of the equipment at the end of the fourth year
- Solution: What is the annual depreciation charge and book value of the machine
- Solution: What is the book value after 5 years using straight line depreciation?
- Solution: Find the depreciation rate of welding machine by straight-line method.
- Solution: What was the principal in the fund at the end of the 12th year?
- Solution: What is the amount of the donation?
- Solution: Find the present value in pesos, of a perpetuity of P15,000 payable semi-annually
- 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?
- Solution: What is the annual interest rate for the time payments?
- Solution: What is the cash price of the property?
- 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?
- Solution: Determine the semi-annual payment for a debt of P10,000
- Solution: How much must be deposited at 6% each year beginning on January 1, year 1?
- Solution: What is the accumulated amount of five-year annuity paying P6,000?
- Solution: How much will be left in the account at the end of the 21st year?
- Solution: How much was initially borrowed if quarterly payment is P2,000.00?
- Solution: What is the monthly amortization?
- Solution: What is the present worth of two P100 payments?
- Solution: Compare how much money you will save or lose on the transaction.
- Solution: When will the girl receive the money if the fund is invested at 8% compounded quarterly?
- Solution: How much, in terms of year zero pesos will be in the account at maturity?
- Solution: How much is the sum of money now deposited 20.15 years ago?
- Solution: How much is that money worth now considering interest at 8% compounded quarterly?
- Solution: Determine the interest rate paid on this account.
- Solution: How much will the merchant collect at the end of the sixth year?
- Solution: What will be the withdrawal amount at the end of the 16th year?
- Solution: Find the compounded interest at the end of 10 years.
- Solution: What was the interest rate paid in this account?
- Solution: Determine the compounded interest after 7 years and 9 months
- Solution: How much would the sum be on January 1, 1993?
- Solution: Approximately how much money will be in the account after 10 years?
- Solution: What is the lump sum due?
- Solution: How much profit in present day pesos is realized?
- Solution: What are the conditions on the rate of interest, i% per year compounded annually?
- Solution: In how many year is required for P2,000 to increase by P3,000
- Solution: How long will it take money to quadruple?
- Solution: How much will a deposit of P1,500 be in 15 years?
- Solution: How much must Alexander Michael pay at the end of two years?
- Solution: Determine the total amount at the end of 5 years of P50,000
- Solution: What is the present value of the inheritance as of the boy’s 6th birthday?
- Solution: Find the present worth of a future payment of P100,000 to be made in 10 years
- Solution: What is the amount of P12,800 in 4 years at 5% compounded quarterly?
- Solution: What is the effective annual interest rate of 7.5% compounded quarterly?
- Solution: What is the effective rate of 14% compounded semi-annually?
- Solution: What is the effective annual interest rate on savings accounts?
- Solution: Find how often the interest is compounded
- Solution: What is the corresponding effective rate of 18% compounded semi-quarterly?
- Solution: What is the effective rate?
- Solution: How much will be repaid if the loan is paid back in one lump sum?
- Solution: How much is the actual rate of interest?
- Solution: What then will be the effective interest rate of a loan?
- Solution: What is the cash price of the television set bought by Annie?
- Solution: Find the present worth of P50,000 which is due at the end of 7 months
- Solution: What will be the future worth of P25,000 after 12 months?
- Solution: Find the proceeds of the promissory note of Agnes Abanilla
- Solution: Find the rate of return annually of a deposit of P110,000.00
- Solution: How much will be due at the end of 75 days?
More Questions in: Engineering Economics (Simple & Compound Interest)
Also Questions in: Engineering Economics (Annuity, Depreciation, Bonds, Breakeven, etc.)
Online Questions and Answers in Engineering Economics
Related Content
Please do Subscribe on YouTube!
P inoyBIX educates thousands of reviewers and students a day in preparation for their board examinations. Also provides professionals with materials for their lectures and practice exams. Help me go forward with the same spirit.
“Will you subscribe today via YOUTUBE?”
What You Also Get: FREE ACCESS & DOWNLOAD via GDRIVE
TIRED OF ADS?
- Become Premium Member and experienced complete ads-free content browsing.
- Full Content Access to Premium Solutions Exclusive for Premium members
- Access to PINOYBIX FREEBIES folder
- Download Reviewers and Learning Materials Free
- Download Content: You can see download/print button at the bottom of each post.
PINOYBIX FREEBIES FOR PREMIUM MEMBERSHIP:
- CIVIL ENGINEERING REVIEWER
- CIVIL SERVICE EXAM REVIEWER
- CRIMINOLOGY REVIEWER
- ELECTRONICS ENGINEERING REVIEWER (ECE/ECT)
- ELECTRICAL ENGINEERING & RME REVIEWER
- FIRE OFFICER EXAMINATION REVIEWER
- LET REVIEWER
- MASTER PLUMBER REVIEWER
- MECHANICAL ENGINEERING REVIEWER
- NAPOLCOM REVIEWER
- Additional upload reviewers and learning materials are also FREE
FOR A LIMITED TIME
If you subscribe for PREMIUM today!
You will receive an additional 1 month of Premium Membership FREE.
For Bronze Membership an additional 2 months of Premium Membership FREE.
For Silver Membership an additional 3 months of Premium Membership FREE.
For Gold Membership an additional 5 months of Premium Membership FREE.
Join the PinoyBIX community.
This offer has expired!
