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Annuities and Uniform Gradient

This document contains sample problems involving concepts in engineering economy such as annuities, present worth, and uniform gradients. It provides two examples of annuity calculations, one involving borrowing money over 10 years at 10% interest and another calculating monthly payments over 30 years at 10% interest. It also gives two examples of present worth calculations, one finding the equivalent present worth of deposits made in future years and another involving an investment increasing by 15% each year until retirement. The document serves as a review of key concepts and calculations for engineering economy.

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Marcial Militante
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944 views3 pages

Annuities and Uniform Gradient

This document contains sample problems involving concepts in engineering economy such as annuities, present worth, and uniform gradients. It provides two examples of annuity calculations, one involving borrowing money over 10 years at 10% interest and another calculating monthly payments over 30 years at 10% interest. It also gives two examples of present worth calculations, one finding the equivalent present worth of deposits made in future years and another involving an investment increasing by 15% each year until retirement. The document serves as a review of key concepts and calculations for engineering economy.

Uploaded by

Marcial Militante
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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lOMoARcPSD|9666799

Annuities and Uniform Gradient

Engineering economy (Eastern Visayas State University)

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lOMoARcPSD|9666799

Review in Engineering Economy - Annuities 1


1. Today, a businessman borrowed money to be paid 4. Engr. Sison borrows P100,000.00 at 10% effective
in 10 equal payments for 10 quarters. If the annual interest. He must pay back the loan over
interest rate is 10% compounded quarterly and 30 years with uniform monthly payment due on the
the quarterly payment is P2,000, how much did he first day of each month. What does Engr. Sison
borrow? pay each month?

A. P17,304.78 C. P17,504.13 A. P838.86 C. P850.12


B. P17,404.12 D. P17,604.34 B. P849.12 D. P840.21

Solution: Solution:

2. What annuity is required over 12 years to equate


with a future amount of P20,000? Assume i = 6%
annually.

A. P1,290.34 C. P1,107.34
B. P1,185.54 D. P1,205.74

Solution:

3. A man loans P187,400 from a bank with interest


at 5% compounded annually. He agrees to pay his
obligations by paying 8 equal annual payments,
the first being due at the end of 10 years. Find
the annual payments.

A. P43,600.10 C. P43,263.91
B. P43,489.47 D. P43,763.20

Solution:

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lOMoARcPSD|9666799

2 Review in Engineering Economy - Uniform Gradient


1. An investment consisting of deposits of P1,000,
P1,500 and P2,000 are made at the end of the 2nd
year, 3rd year and 4th year, respectively. If
money is worth 10%, what is the equivalent
present worth of the investment?

A. P3,129.89 C. P3,372.12
B. P3,319.45 D. P3,490.09

Solution:

2. Engr. Hermo, believing that life begins at 40,


decided to retire and start enjoying life at age
40. He wishes to have upon his retirement the
sum of P5,000,000. On his 21st birthday, he
deposited a certain amount and increased his
deposit by 15% each year until he will be 40. If
the money is deposited in a super savings
account which earns 15% interest compounded
annually, how much was his initial deposit?

A. P17,253.18 C. P17,672.77
B. P17,566.33 D. P17,490.21

Solution:

Alternate Solution:

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