MCQ in Engineering Economics Part 11 | ECE Board

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February 9, 2015

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This is the Multiple Choice Questions Part 11 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.

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Continue Practice Exam Test Questions Part 11 of the Series

⇐ MCQ in Engineering Economics Part 10 | ECE Board Exam

Choose the letter of the best answer in each questions.

501. On her recent birthday, April 22, 2001, Nicole was given by her mother a certain sum of
money as birthday present. She decided to invest the said amount on 20% exact simple
interest. If the account will mature on Christmas day at an amount of P10,000.00, how much
did Nicole receive from her mother on her birthday?

A. P8,807.92

B. P8,827.56

C. P8,832.17

D. P8,845.78

View Answer:
Answer: Option A

Explanation:

502. What is the ordinary interest on P1,500.50 for 182 days at 5.2%?

A. P39.01

B. P39.45

C. P39.82

D. P39.99

View Answer:
Answer: Option B

Explanation:

503. Nicole has P20,400 in cash. She invested it at 7% from March 1, 2006 to November 1,
2006 at 7% interest. How much is the interest using the Banker’s Rule?

A. P972.12

B. P970.78

C. P973.12

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D. P971.83

View Answer:
Answer: Option D

Explanation:

504. The amount of P20,000 was deposited in a bank earning an interest of 6.5% per
annum. Determine the total amount at the end of 7 years if the principal and interest were not
withdrawn during this period?

A. P30,890.22

B. P30,980.22

C. P31,079.73

D. P31,179.37

View Answer:
Answer: Option C

Explanation:

505. A loan for P50,000 is to be paid in 3 years at the amount of P65,000. What is the
effective rate of money?

A. 9.01%

B. 9.14%

C. 9.31%

D. 9.41%

View Answer:
Answer: Option B

Explanation:

506. The amount of P50,000 was deposited in the bank earning an interest of 7.5% per
annum. Determine the total amount at the end of 5 years, if the principal and interest were
not withdrawn during the period.

A. P71,781.47

B. P71,187.47

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C. P71,817.47

D. P71,718.47

View Answer:
Answer: Option A

Explanation:

507. Find the present worth of a future payment of P80,000 to be made in six years with an
interest of 12% compounded annually.

A. P40,540.49

B. P40,450.49

C. P40,350.49

D. P40,530.49

View Answer:
Answer: Option D

Explanation:

508. What is the effective rate corresponding to 18% compounded daily? Take 1 year is
equal to 360 days.

A. 19.61%

B. 19.44%

C. 19.31%

D. 19.72%

View Answer:
Answer: Option D

Explanation:

509. What nominal rate, compounded semi-annually, yields the same amount as 16%
compounded quarterly?

A. 16.09%

B. 16.32%

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C. 16.45%

D. 16.78%

View Answer:
Answer: Option B

Explanation:

510. What rate of interest compounded annually is the same as the rate of interest of 8%
compounded quarterly?

A. 8.07%

B. 8.12%

C. 8.16%

D. 8.24%

View Answer:
Answer: Option D

Explanation:

511. Find the nominal rate, which if converted quarterly could be used instead of 12%
compounded semi-annually.

A. 11.83%

B. 11.09%

C. 11.65%

D. 11.25%

View Answer:
Answer: Option A

Explanation:

512. Which of these gives the lowest effective rate of interest?

A. 12.35% compounded annually

B. 11.90% compounded semi-annually

C. 12.20% compounded quarterly

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D. 11.60% compounded monthly

View Answer:
Answer: Option D

Explanation:

513. Find the compound amount if P2,500 is invested at 8% compounded quarterly for 5
years and 6 months.

A. P3,864.95

B. P3,846.59

C. P3,889.95

D. P3,844.95

View Answer:
Answer: Option A

Explanation:

514. An amount of P1,000 becomes P1,608.44 after 4 years compounded bimonthly. Find
the nominal interest.

A. 11.89%

B. 12.00%

C. 12.08%

D. 12.32%

View Answer:
Answer: Option B

Explanation:

515. If P5,000 shall accumulate for 10 years at 8% compounded quarterly, then what is the
compound interest at the end of 10 years?

A. P6,080.40

B. P6,020.40

C. P6,040.20

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D. P6,060.20

View Answer:
Answer: Option C

Explanation:

516. What is the corresponding effective rate of 18% compounded semi-quarterly?

A. 19.24%

B. 19.48%

C. 19.84%

D. 19.92%

View Answer:
Answer: Option B

Explanation:

517. Find the present worth of a future payment of P100,000 to be made in 10 years with an
interest of 12% compounded quarterly.

A. P30,555.68

B. P30,656.86

C. P30,556.86

D. P30,655.68

View Answer:
Answer: Option D

Explanation:

518. In how many years is required for P2,000 to increase by P3,000 if interest at 12%
compounded semi-annually?

A. 7.86 years

B. 7.65 years

C. 7.23 years

D. 8.12 years

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View Answer:
Answer: Option A

Explanation:

519. The amount of P150,000 was deposited in the bank earning an interest of 7.5% per
annum. Determine the total amount at the end of 5 years, if the principal and interest were
not withdrawn during the period.

A. P215,344.40

B. P213,544.40

C. P234,153.40

D. P255.443.10

View Answer:
Answer: Option A

Explanation:

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

A. 13.7 years

B. 14.2 years

C. 14.7 years

D. 15.3 years

View Answer:
Answer: Option B

Explanation:

521. What is the corresponding effective interest rate of 18% compounded semi-monthly?

A. 19.35%

B. 19.84%

C. 19.48%

D. 19.64%

View Answer:

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Answer: Option D

Explanation:

522. What is the effective rate of 14% compounded semi-annually?

A. 14.49%

B. 14.59%

C. 14.69%

D. 14.79%

View Answer:
Answer: Option A

Explanation:

523. At an interest rate of 10% compounded annually, how much will a deposit of P1,500 be
in 15 years?

A. P6,265.87

B. P6,256.78

C. P6,526.87

D. P6,652.78

View Answer:
Answer: Option A

Explanation:

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

A. P13,256.83

B. P13,655.28

C. P13,625.83

D. P13,265.83

View Answer:
Answer: Option D

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Explanation:

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

A. 4 years

B. 5 years

C. 6 years

D. 7 years

View Answer:
Answer: Option B

Explanation:

526. Compute the equivalent rate of 6% compounded semi-annually to a rate compounded

quarterly.

A. 5.12%

B. 5.96%

C. 5.78%

D. 6.12%

View Answer:
Answer: Option B

Explanation:

527. What is the amount of P12,800 in 4 years at 5% compounded quarterly?

A. P15,461.59

B. P15,146.95

C. P15,641.59

D. P15,614.59

View Answer:
Answer: Option D

Explanation:

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528. By the condition of a will, the sum of P20,000 is left to a girl to be held in trust fund by
her guardian until it amounts to P50,000. When will the girl receive the money if the fund is
invested at 8% compounded quarterly?

A. 11.23 years

B. 11.46 years

C. 11.57 years

D. 11.87 years

View Answer:
Answer: Option C

Explanation:

529. If P50,000 shall accumulate for 10 years at 4% compounded quarterly, find the
compounded interest at the end of 10 years.

A. P2,333.32

B. P2,444.32

C. P2,555.32

D. P2,666.32

View Answer:
Answer: Option B

Explanation:

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

A. P693.12

B. P700.12

C. P702.15

D. P705.42

View Answer:
Answer: Option D

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Explanation:

531. P1,500.00 was deposited in a bank account, 20 years ago. Today, it is worth P3,000.00.
Interest is paid semi-annually. Determine the interest rate paid on this account.

A. 2.9%

B. 3.0%

C. 3.2%

D. 3.5%

View Answer:
Answer: Option D

Explanation:

532. A merchant puts in his P2,000.00 to a small business for a period of six years. With a
given interest rate on the investment of 15% per year, compounded annually, how much will
he collect at the end of the sixth year?

A. P4,626.12

B. P4,262.12

C. P4,383.12

D. P4,444.12

View Answer:
Answer: Option A

Explanation:

533. A man borrowed P100,000 at the interest rate of 12% per annum, compounded
quarterly. What is the effective rate?

A. 12.75%

B. 12.55%

C. 12.45%

D. 12.35%

View Answer:
Answer: Option B

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Explanation:

534. Mandarin Bank advertises 9.5% account that yields 9.84% annually. Find how often the
interest is compounded.

A. Monthly

B. Bimonthly

C. Quarterly

D. Annually

View Answer:
Answer: Option C

Explanation:

535. When will an amount be tripled with an interest of 11.56%?

A. 9 years

B. 10 years

C. 11 years

D. 12 years

View Answer:
Answer: Option B

Explanation:

536. A student plans to deposit P1,500.00 in the bank now and another P3,000.00 for the
next 2 years. If he plans to withdraw P5,000.00 three years from after his last deposit for the
purpose of buying shoes, what will be the amount of money left in the bank after one year of
his withdrawal? Effective annual interest rate is 10%.

A. P1,549.64

B. P1,459.64

C. P1,345.98

D. P1,945.64

View Answer:
Answer: Option A

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Explanation:

537. How much must be invested on January 1, 1998 in order to accumulate P2,000 on
January 1, 2003? Money is worth 6%.

A. P1,509.34

B. P1,249.64

C. P1,378.98

D. P1,494.52

View Answer:
Answer: Option D

Explanation:

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

A. P13,498.59

B. P13,489.59

C. P13,789.98

D. P13,494.52

View Answer:
Answer: Option A

Explanation:

539. A mechanical engineer wishes to accumulate a total of P10,000 in a savings account at

the end of 10 years. If the bank pays only 4% compounded quarterly, what should be the
initial deposit?

A. P6,176.35

B. P6,761.35

C. P6,716.53

D. P6,167.35

View Answer:
Answer: Option C

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Explanation:

540. Funds are deposited in a savings account at an interest of 8% per annum. What is the
initial amount that must be deposited to yield a total of P10,000 in 10 years?

A. P4,196.30

B. P4,721.39

C. P4,796.03

D. P4,631.93

View Answer:
Answer: Option D

Explanation:

541. If P500,000 is deposited at a rate of 11.25% compounded monthly, determine the

compounded interest after 7 years and 9 months.

A. P690,848.73

B. P670,651.23

C. P680,649.56

D. P685,781.25

View Answer:
Answer: Option A

Explanation:

542. An interest rate is quoted as being 7.5% compounded quarterly. What is the effective
annual interest rate?

A. 7.91%

B. 7.51%

C. 7.71%

D. 7.31%

View Answer:
Answer: Option C

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Explanation:

543. You borrow P3,500.00 for one year from a friend at an interest rate of 1.5% per month
instead of taking a loan from a bank at a rate of 18% per year. How much lesser you will pay
by borrowing the money from the bank?

A. P53.89

B. P54.66

C. P53.78

D. P54.98

View Answer:
Answer: Option B

Explanation:

544. A deposit of P1,000 is made in a bank account that pays 8% interest compounded
annually. Approximately how much money will be in the account after 10 years?

A. P2,187.39

B. P2,145.78

C. P2,176.45

D. P2,158.92

View Answer:
Answer: Option D

Explanation:

545. Fifteen years ago P1,000.00 was deposited in a bank account, and today it is worth
P2,370.00. The bank pays interest semi-annually. What was the interest rate paid in this
account?

A. 5.72%

B. 5.78%

C. 5.84%

D. 5.90%

View Answer:

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Answer: Option C

Explanation:

546. P200,000 was deposited on January 1, 1988 at an interest rate of 24% compounded
semi-annually. How much would the sum be on January 1, 1993?

A. P631,627.78

B. P612,890.76

C. P621,169.64

D. P611,672.18

View Answer:
Answer: Option C

Explanation:

547. What is the present worth of two P100 payments at the end of the third year and fourth
year? The annual interest rate is 8%.

A. P150.56

B. P152.88

C. P153.89

D. P151.09

View Answer:
Answer: Option B

Explanation:

548. Consider a deposit of P600.00 to be paid back in one year by P700.00. What is the rate
of interest, i% per year compounded annually such that the net present worth of the
investment is positive? Assume i ≥ 0.

A. 16.50%

B. 16.75%

C. 16.33%

D. 16.67%

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View Answer:
Answer: Option D

Explanation:

549. A firm borrows P2,000 for 6 years at 8 %. At the end of 6 years, it renews the loan for
the amount due plus P2,000 more for 2 years at 8%. What is the lump sum due?

A. P3,260.34

B. P3,280.34

C. P3,270.34

D. P3,250.34

View Answer:
Answer: Option A

Explanation:

550. A machine has been purchased and installed at a total cost of P18,000.00. The
machine will retire at the end of 5 years, at which time it is expected to have a scrap value of
P2,000.00 based on current prices. The machine will then be replaced with an exact
duplicate. The company plans to establish a reserve funds to accumulate the capital needed
to replace the machine. If an average annual rate of inflation of 3% is anticipated, how much
capital must be accumulated?

A. P18,854.38

B. P18,548.38

C. P18,458.38

D. P18,845,38

View Answer:
Answer: Option B

Explanation:

NEXT: MCQ in Engineering Economics Part 12 | ECE Board Exam

Online Questions and Answers in Engineering Economics Series

Following is the list of practice exam test questions in this brand new series:

Engineering Economics MCQs

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 SEE: More Questions and Answers in Engineering Economics

Complete List of MCQs in General Engineering and Applied Sciences per

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Series of MCQ in General Engineering and Applied Sciences

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