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A man borróws 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 he received from the bank. Mr. W borrowed P2,000 from Mr. Y on June 1, 1928 and P500 on June 1, 1930. Mr. W paid P500 on June 1, 1931, P400 on June 1, 1932, and P700 on June 1, 1933. If money is worth 5% compounded annually, what additional payment should Mr. W pay on June 1, 1936 to discharge all remaining liability? The Philippine Society of Mechanical Engineers is planning to construct its own building. Two proposals are being considered: a. The construction of the building now to cost P400,000. b. The construction of a smaller building now to cost P300,000 and at the end of 5 years, an extension to be added to cost P200,000. Which proposal is more economical if interest is 20%, depreciation is disregarded and by how much? Juan de la Cruz borrowed P2,400 at 1% per month payable in 24 equal end-of-the-month payments. How much of the loan remains unpaid immediately after he has paid the 12th payment?

A man borróws 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 he received from the bank. Mr. W borrowed P2,000 from Mr. Y on June 1, 1928 and P500 on June 1, 1930. Mr. W paid P500 on June 1, 1931, P400 on June 1, 1932, and P700 on June 1, 1933. If money is worth 5% compounded annually, what additional payment should Mr. W pay on June 1, 1936 to discharge all remaining liability? The Philippine Society of Mechanical Engineers is planning to construct its own building. Two proposals are being considered: a. The construction of the building now to cost P400,000. b. The construction of a smaller building now to cost P300,000 and at the end of 5 years, an extension to be added to cost P200,000. Which proposal is more economical if interest is 20%, depreciation is disregarded and by how much? Juan de la Cruz borrowed P2,400 at 1% per month payable in 24 equal end-of-the-month payments. How much of the loan remains unpaid immediately after he has paid the 12th payment?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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1. 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 he received from the bank. 2. Mr. W borrowed P2,000 from Mr. Y on June 1, 1928 and P500 on June 1, 1930. Mr. W paid P500 on June 1, 1931, P400 on June 1, 1932, and P700 on June 1, 1933. If money is worth 5% compounded annually, what additional payment should Mr. W pay on June 1, 1936 to discharge all remaining liability? 3. The Philippine Society of Mechanical Engineers is planning to construct its own building. Two proposals are being considered: a. The construction of the building now to cost P400,000. b. The construction of a smaller building now to cost P300,000 and at the end of 5 years, an extension to be added to cost P200,000. Which proposal is more economical if interest is 20%, depreciation is disregarded and by how much? 4. Juan de la Cruz borrowed P2,400 at 1% per month payable in 24 equal end-of-the-month payments. How much of the loan remains unpaid immediately after he has paid the 12th payment? 5. Two years ago, the rental for the use of equipment and facilities was paid 5 years in advance, with the option to renew the rent for another 5 years by payment of P15,000 annually at the start of each year for the rental period. Now, the lessor asks the lessee, if it could be possible to prepay the rental that will be paid annually in the renewed 5- year period. If the lessee agrees, what would be the fair payment to be made to the lessor. USE:i = 8%
Transcribed Image Text:1. 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 he received from the bank. 2. Mr. W borrowed P2,000 from Mr. Y on June 1, 1928 and P500 on June 1, 1930. Mr. W paid P500 on June 1, 1931, P400 on June 1, 1932, and P700 on June 1, 1933. If money is worth 5% compounded annually, what additional payment should Mr. W pay on June 1, 1936 to discharge all remaining liability? 3. The Philippine Society of Mechanical Engineers is planning to construct its own building. Two proposals are being considered: a. The construction of the building now to cost P400,000. b. The construction of a smaller building now to cost P300,000 and at the end of 5 years, an extension to be added to cost P200,000. Which proposal is more economical if interest is 20%, depreciation is disregarded and by how much? 4. Juan de la Cruz borrowed P2,400 at 1% per month payable in 24 equal end-of-the-month payments. How much of the loan remains unpaid immediately after he has paid the 12th payment? 5. Two years ago, the rental for the use of equipment and facilities was paid 5 years in advance, with the option to renew the rent for another 5 years by payment of P15,000 annually at the start of each year for the rental period. Now, the lessor asks the lessee, if it could be possible to prepay the rental that will be paid annually in the renewed 5- year period. If the lessee agrees, what would be the fair payment to be made to the lessor. USE:i = 8%
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