B ico l U n iv e rsit y Name: ____________________________________

COLLEGE OF ENGINEERING
Civil Engineering Department Yr./Blk.: ____________________________________
Legazpi City

[BES 12] Engineering Economics

Worksheet #3 – Interest and the Time Value of Money

: Provide a complete solution/explanation/justification for the problems to gain

FULL MERIT. Please WRITE LEGIBLY and AVOID ERASURES. Kindly provide a separate sheet for
your solutions if necessary.

PART I. Simple Interest.

1. Find the ordinary interest and the amount:

a. on Php 20,000 at 8% for 225 days b. on Php 7,500 at 16% for 270 days

2. Find the exact interest and the amount:

a. on Php 12,000 at 4% for 146 days b. on Php 40,000 at 6% for 312 days

3. Find the actual and approximate time between July 9, 2020 and August 18, 2022.
kapleocadio’20

1st Semester, A.Y. 2020 – 2021 Worksheet #3 | Page 1 of 7

 B ico l U n iv e rsit y Name: ____________________________________
COLLEGE OF ENGINEERING
Civil Engineering Department Yr./Blk.: ____________________________________
Legazpi City

[BES 12] Engineering Economics

Worksheet #3 – Interest and the Time Value of Money

4. The future value of a Php 50,000 investment invested at 14% simple interest at the end of 75 months.

5. Find the interest on Php 22,500 at 8% from March 12 to July 9, 2020.

6. If money is worth 6% simple interest, find the present value of Php 15,000 due at the end of 7 ½ years.

7. A debtor owes Php 22,000 due at the end of 2 years. He asks his creditors for the privilege of paying
the debt immediately. At what simple interest, 6% or 8%, would the creditor prefer to compute the
required present value, and how much would he gain by the better choice?
kapleocadio’20

1st Semester, A.Y. 2020 – 2021 Worksheet #3 | Page 2 of 7

 B ico l U n iv e rsit y Name: ____________________________________
COLLEGE OF ENGINEERING
Civil Engineering Department Yr./Blk.: ____________________________________
Legazpi City

[BES 12] Engineering Economics

Worksheet #3 – Interest and the Time Value of Money

8. Find the present value of Php 20,000 due at the end of 6 months if the discount rate is 5%. What is the
discount?

9. If Php 12,000 is due on December 31, 2020, find the present value on June 19, 2020, if the discount rate
is 8%.

10. Find the simple discount rate which is equivalent to the simple interest rate 6% in accumulating or
discounting money for 8 months.
kapleocadio’20

1st Semester, A.Y. 2020 – 2021 Worksheet #3 | Page 3 of 7

 B ico l U n iv e rsit y Name: ____________________________________
COLLEGE OF ENGINEERING
Civil Engineering Department Yr./Blk.: ____________________________________
Legazpi City

[BES 12] Engineering Economics

Worksheet #3 – Interest and the Time Value of Money

PART II. Compound Interest.

1. Find the interest earned if Php 10,000 is invested for 2 years:

a. at 8% compounded quarterly b. at 8% compounded monthly

2. Accumulate Php 10,000 for 20 years:

a. at 6% compounded annually b. at 6% compounded continuously

3. At the birth of a child, what sum should his father invest in order to provide the child with Php 400,000
at age 21, covering the expense of his college tuition, if the money earns 4% compounded quarterly?
kapleocadio’20

1st Semester, A.Y. 2020 – 2021 Worksheet #3 | Page 4 of 7

 B ico l U n iv e rsit y Name: ____________________________________
COLLEGE OF ENGINEERING
Civil Engineering Department Yr./Blk.: ____________________________________
Legazpi City

[BES 12] Engineering Economics

Worksheet #3 – Interest and the Time Value of Money

4. To provide for the purchase of an automobile worth Php 250,000 as a gift to his son when he graduates
from college 4 years from now, how much should the father invest today at 8% compounded monthly?

5. Find the present value on August 10, 2020 of Php 25,000 due on December 18, 2020 at 4% compounded
monthly.

6. Discount Php 40,000 for 25 years at 14% compounded semiannually. kapleocadio’20

1st Semester, A.Y. 2020 – 2021 Worksheet #3 | Page 5 of 7

 B ico l U n iv e rsit y Name: ____________________________________
COLLEGE OF ENGINEERING
Civil Engineering Department Yr./Blk.: ____________________________________
Legazpi City

[BES 12] Engineering Economics

Worksheet #3 – Interest and the Time Value of Money

7. How much must a man, 25 years of age, invest today in an account paying 2.5% compounded quarterly
in order to have Php 100,000 in the account when he retires at the age of 55, that is, 30 years from
now?

8. I owe Php 50,000 which is due without interest at the end of 2 years. What should my creditor be
willing to accept now in place of the future payment if he is able to invest money at 12% compounded
semiannually?

9. Mr. Allorde owes the bank Php 40,000 now. He negotiates to pay the principal plus accumulated simple
interest at the rate of 6% at the end of 3 years. The bank insists of charging 6% compounded quarterly.
How much more will the bank receive at the end of 3 years as compared to his offer?
kapleocadio’20

1st Semester, A.Y. 2020 – 2021 Worksheet #3 | Page 6 of 7

 B ico l U n iv e rsit y Name: ____________________________________
COLLEGE OF ENGINEERING
Civil Engineering Department Yr./Blk.: ____________________________________
Legazpi City

[BES 12] Engineering Economics

Worksheet #3 – Interest and the Time Value of Money

10. A man borrows Php 150,000 with the creditor agreeing that the interest at the nominal rate of 6% will
be converted into principal only once in each two years. Find the effective rate.

kapleocadio’20

1st Semester, A.Y. 2020 – 2021 Worksheet #3 | Page 7 of 7