1. A price tag of P1200 is specified if paid within 60 days but offers a 3% discount 20.

20. The first cost of a machine is P1,800,000 with a salvage value of P300,000 at the
for cash in 30 days. Find the rate of interest. end of its life of 5 yrs. Determine the total depreciation after 3 years using the
A. 37.11% C. 40.21% sum-of-years-digit method
B. 38.51% D. 39.31% A. P900,000 C. P1,200,000
2. Mr. J. de la Cruz borrowed money from a bank. He received P1340.00 and B. P1,185,770 D. P1,411,200
promised to pay P1500.00 at the end of 9 months. Determine the simple interest 21. The first cost of a machine is P1,800,000 with a salvage value of P300,000 at the
rate and the corresponding discount rate. end of its life of 5 yrs. Determine the total depreciation after 3 years using the
A. 15.92%; 13.73% C. 12.95%; 17.33% double-declining balance method.
B. 18.28%; 13.12% D. 19.25%; 13.33% A. P900,000 C. P1,200,000
3. A bill for a motorboat specifies the full price if paid at the end of 100 days, but B. P1,185,770 D. P1,411,200
offers a 4% discount for cash in 30 days. What is the highest simple interest rate 22. A certain office equipment has a first cost of P200,000 and has a salvage value
can the buyer afford to borrow in order to take advantage of the discount? of P10000 at the end of the 6th year. Determine the depreciation at the end of the
A. 18.4% C. 20.9% 6th year using the sinking fund method at 3% interest.
B. 19.6% D. 21.4% A. P10720 C. P11680
4. The amount of P12800 in 4 yrs. At 5% compounded quarterly is ____. B. P12420 D. P9840
A. P14 785.34 C. P16 311.26 23. A man was offered a Land Bank certificate with a face value of P100,000 which is
B. P15 614.59 D. P15 847.33 baring an interest of 8% per year, payable semi-annually and due in 6 years. If he
5. A nominal interest of 3% compounded continuously is given on the account. What wants to earn 6% semi-annually, how much must he pay for the certificate?
is the accumulated amount of P10 000 after 10 years? A. P90,614.92 C. P90,061.49
A. P13 610.10 C. P13 498.60 B. P96,041.92 D. P99,814.92
B. P13 500.10 D. P13 610.10 24. A marketing company established a program to replace the cars of its sales
6. When compounded bi-monthly, P15 000 becomes P22 318.30 after 5 years. What representative at the end of every 5 years. If the present price of the approved
is the nominal interest rate? type of car is P520,000 with a resale value of 60% of its present value, how much
A. 8% C. 8.13% money must the company accumulate for 5 years if inflation is 10%. Release value
B. 8.03% D. 8.28% will also appreciate at 10% yearly.
7. When compounded bi-monthly, P15 000 becomes P22 318.30 after 5 years. What A. P120,289.51 C. P110.297.27
is the equivalent rate if it is compounded quarterly? B. P129,382.38 D. P122,265.69
A. 8% C. 8.13% 25. An oil well which could produce a net income of P15,000,000 per year for 25 years
B. 8.03% D. 8.28% is being considered to be purchased by a group of businessmen. If the return on
8. When compounded bi-monthly, P15 000 becomes P22 318.30 after 5 years. What investment is targeted to be 20% out of the net income and a sinking fund at 18%
is the effective rate if it is compounded quarterly? interest is to be established to recover the investment, how much must be paid
A. 8% C. 8.13% for the oil well?
B. 8.03% D. 8.28% A. P73,921,184.58 C. P70,215,276.17
9. How many years will it take money to double itself if invested at 5% compounded B. P73,297,198.28 D. P75,973,209.26
annually? 26. An untreated electric wooden pole that will last 10 years under a certain soil
A. 20 C. 14.2 condition cost P12000. If a treated pole will last for 20 years, what is the maximum
B. 33.8 D. 2 justifiable amount that can be paid for the treated pole, if the maximum return on
10. A man buys a house and lot worth P2 million if paid in cash. He agreed to pay a investment is 12%? Consider annual taxes and insurance amount to be 1% of first
downpayment of P500 000 and two installments of P1 million at the end of one cost.
year and the balance at the end of three years. Determine the amount of his A. P15,595 C. P15,932
balance if the interest rate is 22% compounded quarterly. B. P19,995 D. P19,593
A. P1,317, 215 C. P1,300,000 27. A granite quarry purchased of P16,000,000 is expected to be exhaust at the end
B. P1,137,125 D. P1,100,000 of 4 years. If the resale value of the land is P1,000,000, what annual income is
11. If P50,000 is invested at the end of each year for 6 years, at an annual interest required to yield an investment rate of 12%. Use a sinking fund rate.
rate of 7%, what is the total peso amount available upon the deposit in the sixth A. P5,515,440 C. P5,505,400
payment? B. P5,525,500 D. P5,534,200
A. P321,000 C. P300,000 28. A telephone company purchased a microwave equipment for P60 million with a
B. P357,700 D. P426,000 salvage value of P6 million over a period of 5 years and pay a lump sum of P4
12. An instructor plans to retire in one year and want an account that will pay P25 000 million for the maintenance cost. Minimum attractive rate of return is 16%
a year for the next 15 years. Assuming a 6% annual effective interest rate, what annually. Compute the capitalized cost.
is the amount he would need to deposit now? A. P116,710,901 C. P106,610,801
A. P249,000 C. 248,500 B. P73,600,000 D. P173,600,000
B. P242,806 D. 250,400 29. A businessman invests in a medium-scale business which cost him P470,000.
13. A manufacturing firm wishes to give each of its 80 employees a holiday bonus. The net annual return estimated is P140,000 for each of the next 8 years Compute
How much is needed to invest monthly for a year at 12% nominal interest rate, the benefit-to-cost ratio if the annual rate of interest is 18%.
compounded monthly, so that each employee will receive a P2000 bonus? A. 1.21 C. 2.23
A. P12,608 C. P12,600 B. 1.76 D. 1.11
B. P12,615 D. P12,300 30. A broadcasting corporation was formed duly approved by the SEC has a P20-
14. A series of year and payments extending over eight years are as follows: P10,000 million working capital and a P80-million fixed capital. Annual depreciation
for the first year, P20,000 for the second year, P50,000 for the third year, and amounts to P5-million and the expected annual profit is P16 million. Compute the
P40,000 for each year from the fourth through the 8th year. Find the equivalent payout period in years.
annual worth of these payments if the annual interest is 8%. A. 3.81 C. 6.25
A. P44,800 C. P35,650 B. 1.59 D. 5.26
B. P30,563 D. P33,564 31. A broadcasting corporation was formed duly approved by the SEC has a P20-
15. A service car whose cash price was P540,000 was bought with a downpayment million working capital and a P80-million fixed capital. Annual depreciation
of P162,000 and monthly installments of P10,874.29 for 5 years. What was the amounts to P5-million and the expected annual profit is P16 million. Compute the
rate of interest if compounded monthly? recovery period in years.
A. 30% C. 20% A. 3.81 C. 6.25
B. 24% D. 15% B. 1.59 D. 5.26
16. An engine is expected to have a maintenance cost of P10,000 the first year. It is 32. A local factory assembling calculators produces 400 unit per month and sells them
believed that the maintenance cost will increase P5000 per year. The interest rate at P1,800 each. Dividend are 8% on the on the 8000 shares with a par value of
is 6% compounded annually. Over the 10-year period, what will be the 250 each. The fixed operating cost per month is P25,000. Other costs are P1000
approximate affective annual maintenance cost? per unit. Determine the break-even point. If only 200 units were produces per
A. P30,110 C. P34,520 month, determine the profit or loss.
B. P24,500 D. P13,450 A. 48; P121,667 C. 50; P112,657
17. Find the present value, in pesos, of a perpetuity of P15,000 payable semi-annually B. 45; P122,677 D. 48; P212, 667
if money is worth 8% compounded quarterly.
A. 372,537 C. 373,767
B. 374,977 D. 371,287
18. The first cost of a machine is P1,800,000 with a salvage value of P300,000 at the
end of its life of 5 yrs. Determine the total depreciation after 3 years using the
straight-line method.
A. P900,000 C. P1,200,000
B. P1,185,770 D. P1,411,200
19. The first cost of a machine is P1,800,000 with a salvage value of P300,000 at the
end of its life of 5 yrs. Determine the total depreciation after 3 years using the
constant percentage method (also known as the Matheson’s method).
A. P900,000 C. P1,200,000
B. P1,185,770 D. P1,411,200