Coe Eco Practice Problems

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FAITH COLLEGES

COLLEGE OF ENGINEERING
ENGINEERING ECONOMICS

DIRECTIONS:

1. Read the following questions and solve for the unknown.

QUESTIONS:

1. Company XYZ is upgrading their warehouse’s fire alarm systems. They borrow
money amounting to ₱ 10,000,000.00 with 10% interest rate per year. Determine
the following:
 payment after 5 years and 10 years using simple interest
 payment after 5 years and 10 years using compound interest
 interest amount at 5 years and 10 years using simple interest
 interest amount at 5 years and 10 years using compound interest
 cash flow diagram for 5 years, 10 years and 15 years

2. What is the interest rate if your two million pesos today is equivalent to:
 3 million pesos, 3 years from now
 4 million pesos, 2 years from now
 1 million pesos, 1 year ago

3. Determine the loan amount borrowed at 8% interest rate per year if the paid
amount today is:
 ₱ 10,000,000.00, borrowed 3 years ago at simple interest rate
 ₱ 18,000,000.00, borrowed a year ago at simple interest rate
 ₱ 10,000,000.00, borrowed today at simple interest rate
 ₱ 10,000,000.00, borrowed 3 years ago at compound interest rate
 ₱ 18,000,000.00, borrowed a year ago at compound interest rate
 ₱ 10,000,000.00, borrowed today at compound interest rate
 all cash flow diagrams

4. How many years would it take for your investment of ₱ 500,000.00 to accumulate
₱ 200,000.00 interest at 2% per year?
 using simple interest
 using compound interest
 cash flow diagrams of all scenarios
5. The company received its capital from private corporations in the form of funding.
The company was able to make an investment return of 35% each year for 7 years.
Determine the accumulating interest amount of the funding per year from the
following corporations:
 Corporation A with funding of ₱ 500,000.00 at simple interest
 Corporation B with funding of ₱ 1,000,000.00 at simple interest
 Corporation C with funding of ₱ 1,500,000.00 at simple interest
 Corporation A with funding of ₱ 500,000.00 at compound interest
 Corporation B with funding of ₱ 1,000,000.00 at compound interest
 Corporation C with funding of ₱ 1,500,000.00 at compound interest
 cash flow diagrams of all scenarios

6. Determine the missing element. All periods are in years and all amounts are in
peso.

7. Determine the missing element. All periods are in years and all amounts are in
peso.
8. Determine the missing element. All periods are in years and all amounts are in
peso.

9. Determine the missing element. All periods are in years and all amounts are in
peso.

- END OF PRACTICE PROBLEMS-

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