University of Science and Technology of Southern Philippines

C.M. Recto Avenue, Lapasan, Cagayan de Oro City, Philippines

College of Engineering and Architecture
Department of Electrical Engineering

ENGINEERING ECONOMY
(BOARD EXAM PROBLEMS)

Submitted by:
Valcorza, Vea E.
​BSEE-4a_e1
Submitted to:
Engr. Roy S. Tancongco
Instructor
Problem 1: ECE Board November 1998
What will be the future worth of money after 12 months, if the sum of P25, 000 is today at simple
interest rate of 1% per month?
A. P30, 000
B. P29, 000
C. P28, 000
D. P27, 859
SOLUTION:

F = P (1 + in)
= 25000 [ 1 + 0.01(12)]
= P 28, 000

Problem 2: ME Board April 1995

P4000 is borrowed for 71 days at 16% per annum simple interest. How much will be due at the end of 75
days?

A. P4, 133.33
B. P4, 333.33
C. P4, 166.67
D. P4, 150.00

SOLUTION :

F = P (1 + in)
75
= 4000 [ 1 + 0.16( 360 )]
= P 4, 133.33

Problem 3: ME Board April 1993

Agnes Abanilla was granted a loan of P20, 000 by her employer CPM Industrial Fabricator and
Construction Corporation with an interest of 6% for 180 days on the principal collected in advance. The
corporation would accept a promissory note for P20, 000 non-interest for 180 days. If discounted at
once, find the prices of the note.

A. P18, 600
B. P18, 800
C. P19, 000
D. P19, 200

SOLUTION:

Interest = 0.06 (20, 000) P roceeds of the note = 20, 000 − 1200
= 1200 = P 18, 800

Problem 4: CE Board May 1997

A deposit of P110, 000 was made for 31 days. The net interest after deducting 20% withholding tax is
P890.36. Fund the rate of return annually.

A. 11.95%
B. 12.75%
C. 11.75%
D. 12.25%

SOLUTION:

890.36 = 0.8 (I) since I = 1, 112.95

 I = 1, 112.95 I = P in
31
1, 112.95 = 110, 000 (i)( 360 )
i = 11.75 %

Problem 5: ME Board April 1998

A bank charges 12% simple interest on a P300.00 loan. How much will be repaid if the loan is paid back
in one lump sum after the years?

A. P408.00
B. P415.00
C. P551.00
D. P450.00

SOLUTION:

F = P (1 + in)
F = 300 [ 1 + 0.12(3)]
F = P 408.00

Problem 6: ECE Board April 1999

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

A. 19.25%
B. 19.48%
C. 18.46%
D. 18.95%

SOLUTION:
8
ER = (1 + 8i ) − 1
8
ER = (1 + 0.18
8 ) −1
ER = 19.48 %

Problem 7: ECE Board November 1998

The effective rate of 14% compounded semi annually is

A. 14.49%
B. 12.36%
C. 14.94%
D. 14.88%

SOLUTION:
2
ER = (1 + 2i ) − 1
2
ER = (1 + 0.14
2 ) −1
ER = 14.49 %
Problem 8: EE Board June 1990

On his 6th birthday, a boy is left an inheritance. the inheritance will be paid in a lump sum of P10, 000 on
his 21st birthday. What is the present value of the inheritance as of the boys 6th birthday, if the interest
is compounded annually? Assume i=4%

A. P6, 500
B. P8, 600
C. P5, 500
D. P7, 500

SOLUTION:

F = P (1 + i)n 10, 000 = P (1 + 0.04)21 F 1 = P (1 + i)6

where; i = 0.04 P = 4, 388.336 = (4, 388.336)(1 + 0.04)6
n = 21 = P 5, 552.644

NOTE : Since from the choices, the nearest answer is ​P5, 500​.

Problem 9: ME Board October 1995

In year zero, you invest P10, 000.00 in a 15% security for 5 years. During that time, the average annual
inflation is 6%. How much, in terms of year zero pressure will be in the account at maturity?

A. P12, 020.00
B. P13, 030.00
C. P14, 040.00
D. P15, 030.00

SOLUTION:

Let F = value of the account after 5 years considering there was no inflation.

P’ = value of the account the today’s peso due to inflation.

F = P (1 + i)n F = P ′(1 + i)n

F = 10, 000(1 + 0.15)5 20, 113.57 = P ′(1 + 0.06)5
F = 20, 113.57 P ′ = P 15, 530.00

Problem 10: ME Board April 1996

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. P153
B. P160
C. P162
D. P127

SOLUTION:

P = P1 + P2
F1 F2
P = (1+i)3
+ (1+i)4

100 100
P = (1+0.08)3
+ (1+0.08)4
P = P 153