TCCB 421 - ENGINEERING ECONOMICS

Midterm Homework 01
Directions:
a) Solve the following questions
b) Filename format: Surname_ECO_Mid_HW01
b) Submit in PDF format as one file.
Questions:
1. Ms. Glydel Marquez borrowed money from a bank. She received from the bank Php1,342

and promised to repay Php1,500 at the end of 9 months. Determine the following: (a)

simple interest rate (b) discount rate or often referred as Banker’s discount.

2. Ms. Lizel Latinazo borrowed money from Banco de Oreo. She received from the bank

P2000 and promised to repay P2500 at the end of 10 months. Determine the discount

rate?

3. A man borrowed P2000 from a bank and promises to pay the amount for one year. He

received only the amount of P1920 after the bank collected an advance interest of P80.

What was the rate of discount and the rate of interest that the bank collected in advance.

4. A man borrows money from a bank which uses a simple discount rate of 14%. He signs a

promissory note promising to pay P500 per month at the end of 4th, 6th, and 7th months

respectively. Determine the amount of money that he received from the bank.

5. 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 pesos will be in the

account at maturity?

6. Dr. Gary Sy invests P50,000 in a time deposit that yields 10% for his retirement 30 years
from now. If the inflation rate is 5%, what will be the value of the account at maturity in
terms of today’s peso.