1. First Benchmark Publishing’s gross margin is 50% of sales.

The operating costs of the publishing are

estimated at 15% of sales. If the company is within the 40% tax bracket, determine the percent of sales is
their profit after taxes?
A. 21 %
B. 20 %
C. 19 %
D. 18 %
2. A feasibility study shows that a fixed capital investment of P10,000,000 is required for a proposed construction
firm and an estimated working capital of P2,000,000. Annual depreciation is estimated to be10% of the fixed
capital investment. Determine the rate of return on the total investment if the annual profit is P3,500,000.
A. 28.33 %
B. 29.17 %
C. 30.12 %
D. 30.78 %

3. Engr. Trinidad loans from a loan firm an amount of P100,000 with a rate of simple interest of 20% but the
interest was deducted from the loan at the time the money was borrowed. If at the end of one year, she has
to pay the full amount of P100,000, what is the actual rate of interest?
A. 23.5 %
B. 24.7 %
C. 25.0 %
D. 25.8 %

4. Mr. Bacani borrowed money from the bank. He received from the bank P1,842 and promised to repay
P2,000 at the end of 10 months. Determine the rate of simple interest.
A. 12.19 %
B. 12.03 %
C. 11.54 %
D. 10.29 %

5. It is the practice of almost all banks in the Philippines that when they grant a loan, the interest for one year is
automatically deducted from the principal amount upon release of money to a borrower. Let us therefore
assume that you applied for a loan with a bank and the P80,000 was approved at an interest rate of 14% of
which P11,200 was deducted and you were given a check of P68,800. Since you have to pay the amount of
P80,000 one year after, what then will be the effective interest rate?
A. 16.02 %
B. 16.28 %
C. 16.32 %
. 16.47 %

6. A investor wishes to earn 7% on his capital after payment of taxes. If the income from an available
investment will be taxed at an average rate of 42%, what minimum rate of return, before payment
of taxes, must the investment offer to be justified?
A. 12.07 %
B. 12.34 %
C. 12.67 %
D. 12.87 %

7. Miss Evilla borrowed money from a bank. She receives from the bank P1,340.00 and promised to pay
P1,500.00 at the end of 9 months. Determine the corresponding discount rate or often referred to as the
“banker’s discount”.
A. 13.15 %
B. 13.32 %
C. 13.46 %
D. 13.73 %

8. What is the ordinary interest on P1,500.50 for 182 days at 5.2%?

A. P39.01
B. P39.82
C. P39.45
D. P39.99

9. What is the effective rate corresponding to 18% compounded daily? Take 1 year is equal to 360 days.
A. 19.61 %
B. 19.44 %
C. 19.31 %
D. 19.72 %
10.Which of these gives the lowest effective rate of interest?
A. 12.35 % compounded annually
B. 11.90 % compounded annually
C. 12.20 % compounded annually
D. 11.60 % compounded annually

11.How long will it take money to double itself if invested at 5% compounded annually?
A. 13.7 years
B. 14.7 years
C. 14.2 years
D. 15.3 years

12.A sum of P1,000 is invested now and left for eight years, at which time the principal is withdrawn. The
interest has accrued is left for another eight years. If the effective annual interest rate is 5%, what will
be the withdrawal amount at the end of the 16th year?
A. P693.12
B. P700.12
C. P702.15
D. P705.42

13.A student plans to deposit P1,500 in the bank now and another P3,000 for the next 2 years. If he plans to
withdraw P5,000 three years from after his last deposit for the purpose of buying shoes, what will be the
amount of money left in the bank after one year of his withdrawal? Effective annual interest rate is 10%.
A. P1,549.64
B. P1,459.64
C. P1,345.98
D. P1,945.64

14.What is the present worth of two P 100 payments at the end of the third year and fourth year? The
annual interest rate is 8%.
A. P 150.56
B. P 152.88
C. P 153.89
D. P 151.09

15.In year zero, you invest P 10,000.00 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?
A. P 15,030.03
B. P 20,113.57
C. P 18,289.05
D. P 16,892.34

16.What is the present worth of a P500 annuity starting at the end of the third year and continuing to the end
of the fourth year, if the annual interest rate is 10 %?
A. P 727.17
B. P 717.17
C. P 714.71
D. P 731.17

17.A factory operator bought a diesel generator set for P 10,000.00 and agreed to pay the dealer uniform sum at
the end of each year for 5 years at 8% interest compounded annually, that the final payment will cancel the
debt for principal and interest. What is the annual payment?
A. P 2,500.57
B. P 2,544.45
C. P 2,540.56
D. P 2,504.57

18.A man loans P 187,400 from a bank with interest at 5% compounded annually. He agrees to pay his
obligations by paying 8 equal annual payments, the first being due at the end of 10 years. Find the annual
payments.
A. P 43,600.10
B. P 43,489.47
C. P 43,263.91
D. P 43,763.20
19.A young engineer borrowed P 10,000 at 12% interest and paid P 2,000 per annum for the last 4 years. What
does he have to pay at the end of the fifth year in order to pay off his loan?
A. P 6,999.39
B. P 6,292.93
C. P 6,222.39
D. P 6,922.93
20.A P 1,000,000 issue of 3%, 15-year bond was sold at 95%. What is the rate of interest of this investment?
A. 3.0%
B. 3.4%
C. 3.7%
D. 4.0%

21.A VOM has a selling price of P 400. If its selling price is expected to decline at a rate of 10% per annum due
to obsolescence, what will be its selling price after 5 years?
A. P 222.67
B. P 212.90
C. P 236.20
D. P 231.56

22.ABC Corporation makes it a policy that for any new equipment purchased, the annual depreciation cost
should not exceed 20% of the first cost at any time with no salvage value. Determine the length of
service life necessary if the depreciation used is the SYD method.
A. 7 eyars
B. 8 years
C. 9 years
D. 10 years
23.Shell Philippines, a multinational company, has a total gross income for a particular year of P 50,000,000. The
taxable income after taking all deductions except for depletion is P 18,500,000. What is the allowable
depletion allowance for that particular year? Take percentage of gross income for oil as 22%.
A. P 9,358.41
B. P 9,228.45
C. P 9,250.00
D. P 9,308.45
24.A manufacturer produces certain items at a labor cost of P 115 each, material cost of P 76 each and variable
cost of P 2.32 each. If the item has a unit price of P 600, how many units must be manufactured each month
for the manufacturer to break even if the monthly overhead is P428,000
A. 1,033
B. 1,037
C. 1,043
D. 1,053
25.A telephone switchboard 100 pair cable can be made up with either enameled wire or tinned wire. There will
be 400 soldered connections. The cost of soldering a connection on the enameled wire will be P 1.65 on the
tinned wire, it will be P 1.15. A 100- pair cable made up with enameled wire cost P 0.55 per linear foot and
those made up of tinned wire cost P 0.75 per linear foot. Determine the length of cable run in feet so that the
cost of each installation would be the same.
A. 1,000 feet
B. 1,040 feet
C. 1,100 feet
D. 1,120 feet
26.What is defines as the analysis and evaluation of the monetary consequences by using the theories
and principles of economics to engineering applications, designs and projects?
A. Economic Analysis
B. Engineering cost analysis
C. Engineering economy
D. Design cost analysis
27.What is defined as any tangible economic product that contributes directly or indirectly to the satisfaction
of human want?
A. Services
B. Goods
C. Commodities
D. Goods or commodities
28.What are the two classifications of goods and services?
A. Local and imported
B. Raw and finished
C. Consumer and producer
D. Ready-made and made-to-order

29.What refers to the goods and services that are desired by human and will be acquired only after all the
needs have been satisfied?
A. Producer products
B. Consumer products
C. Luxury
D. Necessity
30.What is considered as the basic consuming or demanding unit of a commodity?
A. Seller
B. Manufacturer
C. Producer
D. Buyer or consumer

31.What is a market situation whereby there is only one buyer of an item for which there is no
goods substitute?
A. Monopsony
B. Monopoly
C. Oligopoly
D. Oligopsony

32.What market situation exists where there is only one buyer and only one seller?
A. Monopsony
B. Monopoly
C. Bilateral monopsony
D. Bilateral monopoly

33.If there is only one seller and many buyers, the market situation is .
A. Duopsony
B. Oligopoly
C. Oligopsony
D. Monopoly

34.Oligopoly exists when there is/are:

A. Few sellers and few buyers
B. Few sellers and many buyers
C. Many sellers and few buyers
One seller and few buyers

35.Duopoly is a market situation where there is/are:

A. Few sellers and few buyers
B. Few sellers and many buyers
C. Many sellers and few buyers
D. One seller and few buyers

36.What refers to the market situation in which any given product is supplied by a very large number of
vendors and there is no restriction against additional vendors from entering the market?
A. Perfect competition
B. Oligopoly
C. Oligopsony
D. Monopoly

37.What is the opposite of perfect competition?

A. Monopsony
B. Oligopoly
C. Oligopsony
D. Monopoly
38.A is a market situation where economies of scale are so significant that cost are only minimized
when the entire output of an industry is supplied by a single producer so that the supply costs are lower
under monopoly that under perfect competition.
A. Perfect monopoly
B. Bilateral monopoly
C. Natural monopoly
D. Ordinary monopoly
39.What refers to the need, want or desire for a product backed by the money to purchase it?
A. Supply
B. Demand
C. Product
D. Good
40.“Under conditions of perfect competition, the price at which any given product will be supplied and
purchased is the price that will result in the supply and the demand being equal.” This statement is known as
the:
A. Law of diminishing return
B. Law of supply
C. Law of demand
D. Law of supply and demand

41.What is defined as the interest on a load or principal that is based only on the original amount of the loan
or principal?
A. Effective rate of interest
B. Nominal rate of interest
C. Compound interest
D. Simple interest
42.One banker’s year is equivalent to days.
A. 300
B. 360
C. 365
D. 366
43.The difference between the present and future worth of money at some time in the future is called .
A. Discount
B. Deduction
C. Inflation
D. Depletion

44.What refers to the amount of money paid for the use of borrowed capital?
A. Interest
B. Rate of interest
C. Simple interest
D. Principal

45.What is defined as the investment of loan or principal which is based not only on the original amount of
the loan or principal but the amount of loaned or principal plus the previous accumulated interest?
A. Effective rate of interest
B. Nominal rate of interest
C. Compound interest
D. Simple interest
46.A uniform series of payment occurring at equal interval of time is called .
A. Annuity
B. Amortization
C. Depreciation
D. Bond
47.What is the type of annuity where the payments are made at the end of each period starting from the
first period?
A. Ordinary annuity
B. Perpetuity
C. Annuity due
D. Deferred annuity
48.What is the type of annuity that does not have a fixed time span but continues indefinitely or forever?
A. Ordinary annuity
B. Perpetuity
C. Annuity due
D. Deferred annuity
49.Which is NOT an essential element of an ordinary annuity?
A. The amounts of all payments are equal.
B. The payments are made at equal interval of time.
C. The first payment is made at the beginning of the first period.
D. Compound interest is paid on all amounts in the annuity.

50.What refers to the present worth of all the amount the bondholder will receive through his possession
of the bond?
A. Par value of bond
B. Face value of bond
C. Redeemed value of bond
D. Value of bond
51. What refers to a document that shows proof of legal ownership of a financial security?
A. Bond
B. Bank note
C. Coupon
D. Check
52. What type of bond whose guaranty is in lien on railroad equipment, such as freight and passenger cars,
locomotives, etc.?
A. Railroad bond
B. Equipment obligation bond
C. Equipment bond
D. Equipment trust bond

53. What bond whose security is a mortgage on certain specified assets of the corporation?
A. Registered bond
B. Collateral trust bond
C. Mortgage bond
D. Debenture bond
54. A type of bond where the corporation pledges securities which it owns such as the stock or bonds of one of
its subsidiaries.
A. Mortgage bond
B. Joint bond
C. Security bond
D. Collateral trust bond
55. What type of bond which can be redeemed before maturity date?
A. Preferred bond
B. Registered bond
C. Incorporators bond
D. Callable bond
56. The price at which the callable bond will be redeemed from the bondholder is called
.
A. Par value
B. Call value
C. Face value
D. Redemption value
57. In what method of computing depreciation where it assumes that the loss in value is directly
proportional to the age of the equipment or asset?
A. Straight line method
B. Sinking fund method
C. Sum-of-year digit method
D. Declining balance method
58. In what method of computing depreciation where it assumes that the annual cost of depreciation is a fixed
percentage of the book value at the beginning of the year?
A. Straight line method
B. Sinking fund method
C. Sum-of-year digit method
D. Declining balance method
59. The declining balance method is also known as .
A. Double percentage method
B. Constant percentage method
C. Modified sinking fund method
D. Modified SYD method
60. What type of depreciation is due to the reduction of the physical ability of an equipment or asset to
produce results?
A. Functional depreciation
B. Design depreciation
C. Physical depreciation
D. Demand depreciation
61. What is defined as the reduction of the value of certain natural resources such as mines, oil, timber,
quarries, etc. due to the gradual extraction of its contents?
A. Depletion
B. Inflation
C. Depreciation
D. Deflation
62. Under the depletion allowance method in computing depreciation, the depletion charge is equal to either
whichever is smaller.
A. Fixed percentage of gross income or the net taxable income
B. Fixed percentage of gross income or 50% of the net taxable income
C. 50% of the fixed percentage of gross income or 50% of the net taxable income
D. 50% of the fixed percentage of gross income or the net taxable income

63. What is another term for “unit method” for computing depletion?
A. Initial cost method
B. Percentage method
C. Factor method
D.Sinking fund method

64. What do you call the after-tax present worth of all depreciation effects over the depreciation period
of the asset?
A. Asset recovery
B. Depreciation recovery
C. Period recovery
D. After-tax recovery
65. The amount of property in which a willing buyer to a willing seller for the property when neither one is under
the compulsion to buy nor to sell is called .
A. Fair value
B. Market value
C. Good will value
D. Book value
66. What refers to the value of an asset which a disinterested third party, different from the buyer and seller,
will determine in order to establish a price acceptable to both parties?
A. Book value
B. Market value
C. Fair value
D. Franchise value
67. The first cost to be incurred if the piece of equipment now in place had been bought for a second hand dealer
or some other business is called .
A. Material cost
B. Fixed cost
C. First cost
D. In-place value

68. The process of determining the value or worth of a physical property for specific reason is called .
A. Investment
B. Valuation
C. Economy
D. Depletion
69. What refers to the present worth of cost associated with an asset for an infinite period of time?
A. Annual cost
B. Increment cost
C. Capitalized cost
D. Operating cost
70. What is normally used to compare alternatives that accomplish the same purpose but have unequal lives?
A. Capitalized cost method
B. Present worth method
C. Annual cost method
D. MARR

71. What refers to an imaginary cost representing what will not be received if a particular strategy is
rejected?
A. Opportunity cost
B. Ghost cost
C. Horizon cost
D. Null cost

72. What is the factor name of the formula (1+i)^-n?

A. Uniform gradient future worth
B. Capital recovery
C. Single payment present worth
D. Single payment compound amount

73. A form of business organization in which a person conducts his business alone and entirely for his own
profit, being solely responsible for all its activities and liabilities.
A. Sole proprietorship
B. Entrepreneurship
C. Partnership
D. Corporation

74. What is the simplest form of business organization?

A. Sole proprietorship
B. Partnership
C. Enterprise
D. Corporation

75. In case of bankruptcy of a partnership,

A. The partners are not liable for the liabilities of the partnership
B. The partnership assets (excluding the partners personal assets) only will be used
to pay the liabilities
C. The partners personal assets are attached to the debt of the partnership
D. The partners nay sell stock to generate additional capital

76. Which is true about corporation?

A. It is worse type of business organization.
B. The minimum number of incorporators to start a corporation is three.
C. Its life is dependent on the lives of the incorporators.
D. The stock holders of the corporation are only liable to the extent of their investments.

77. An association of two or more persons for the purpose of engaging into a business for profit is called
.
A. Entrepreneurship
B. Partnership
C. Proprietorship
D. Corporation

78. What stock represents ownership and enjoys certain preferences than ordinary stock?
A. Authorized stock
B. Preferred stock
C. Incorporator’s stock
D. Presidential stock
 79. What refers to the residual value of a company’s assets after all outside liabilities
(shareholders excluded) have been allowed for?
A. Dividend
B. Equity
C. Return
D. Par value

80. Cash money and credit necessary to establish and operate an enterprise are generally called
.
A. Capital
B. Funds
C. Assets
D. Liabilities

81. The profit derived from a project or business enterprise without consideration of obligations to
financial contributors and claims of others based on profit is known as .
A. Yield
B. Economic return
C. Earning value
D. Gain

82. Which of the following is an example of intangible asset?

A. Cash
B. Investment in subsidiary companies
C. Furnitures
D. Patents

83. What refers to the interest rate at which the present work of the cash flow on a project is zero of the
interest earned by an investment?
A. Economic return
B. Yield
C. Rate of return
D. Return of investment

84. What is an accounting term that represents an inventory account adjustment?

A. Cost of goods sold
B. Cost accounting
C. Standard cost
D. Overhead cost

85. What is used to record historical financial transactions?

A. Bookkeeping system
B. Ledger system
C. Balance check
General journal system

86. The original record of a business transaction is recorded in this book.

A. Work book
B. Journal
C. Ledger
D. Account book

87. All are classified under direct labor expenses EXCEPT one. Which one?
A. Inspection cost
B. Testing cost
C. Assembly cost
D. Supervision cost
88. The ratio of the net income before taxes to net sales is called .
A. Current ratio
B. Inventory turnover
C. Profit margin ratio
D. Price-earnings ratio

89. What is used when a quick estimate of the doubling time for the invested money is needed?
A. Rule of 48
B. Rule of 36
C. Rule of 24
D. Rule of 72

90. What is the reduction in the money value of capital asset is called?
A. Capital expenditure
B. Capital loss
C. Loss
D. Deficit

91. What denotes in the fall in the exchange rate of one currency in terms of the others? This term is
usually applies to the floating exchange rate.
A. Currency appreciation
B. Currency depreciation
C. Currency devaluation
D. Currency float

92. What refers to the saving which takes place because goods are not available for consumption
rather than consumer really want to save?
A. Compulsory saving
B. Consumer saving
C. Forced saving
D. All of the above

93. As applied to capitalized asset, the distribution of the initial cost by a periodic changes to operation as in
depreciation or the reduction of a debt by either periodic or irregular prearranged programs is called
.
A. Annuity
B. Amortization
C. Capital recovery
D. Annuity factor

94. The true value of interest rate computed by equations for compound interest for a 1 year period is
known as .
A. Expected return
B. Nominal interest
C. Effective interest
D. Economic return

95. Gross margin is the ratio of the gross profit to .

A. Net sale
B. Owner’s equity
C. Inventory turnover
D. Quick assets

96. What is a government bond which has an indefinite life rather than a specific maturity?
A. Coupon
B. T-bill
C. Debenture
D. Consol
 97. What is a stock of a product which is held by a trade body or government as a means of regulating the
price of that product?
A. Stock pile
B. Hoard stock
C. Buffer stock
D. Withheld stock

98. The ability to convert assets to cash quickly is known as .

A. Solvency
B. Liquidity
C. Leverage
D. Insolvency

99. The financial health of the company is measured in terms of:

A. Liquidity
B. Solvency
C. Relative risk
All of the above

100. The common ratio is the ratio of:

A. Net credit sales to average net receivable
B. Current assets to current liabilities
C. Gross profit to net sales
D. Net income to owner’s equity

101. What is the ratio of the quick assets to current liabilities?

A. Profit margin ratio
B. Price-earnings ratio
C. Return of investment ratio
D. Quick ratio

102. Receivable turnover is the ratio of:

A. Net credit sales to average net receivables
B. Market price per share to earnings per share
C. Cost of goods sold to average cost of inventory on hand
D. Common shareholders’ equity to number of outstanding shares
103. What is the ratio of the market price per share to earnings per share called?
A. Gross margin
B. Price-earnings ratio
C. Book value per share of common stock
D. Inventory turnover

104. What is a gross margin?

A. The ratio of net income before taxes to net sales
B. The ratio of gross profit to net sales
C. The ratio of common shareholders’ equity to the number of outstanding shares
D. The ratio of cost of goods sold to average cost of inventory on hand

105. What is an inventory turnover?

A. The ratio of net income before taxes to net sales
B. The ratio of gross profit to net sales
C. The ratio of common shareholders’ equity to the number of outstanding shares
D. The ratio of cost of goods sold to average cost of inventory on hand

106. What is a method of determining when the value of one alternative becomes equal to the value
of another?
A. Specific identification method
B. Average cost method
C. Break-even analysis
 D. Incremental value method

107. What is defined as the length of time usually in years, for cumulative net annual profit to equal
the initial investment?
A. Return of investment period
B. Turnover period
C. Break-even period
D. Payback period

108. Which of the following is an accelerated depreciation method?

A. Straight line method and sinking fund method
B. Straight line method and double declining balance method
C. Double declining balance method and SYD method
D. SYD method and sinking fund method

109. What refers to the reduction in the level of a national income and output usually
accompanied by a fall in the general price level?
A. Deflation
B. Inflation
C. Devaluation
D. Depreciation

110. The paper currency issued by the central bank which forms part of the country’s
money supply is called .
A. T-bills
B. Bank notes
C. Check
D. Coupon

111. What is the ratio of the market price per share to the earnings per share?
A. Inventory turnover
B. Price-earnings
C. Book value per share of common stock
D. Profit margin

112. What refers to the ration of the net income before taxes to net sales?
A. Receivable turnover
B. Acid test ratio
C. Return on investment
D. Profit margin

113. The suspension of repayment of debt or interest for a specified period of time is called
.
A. Moratorium
B. Escrow
C. Numeraire
D. Porcupine

114. An annuity whereby the payment is postponed for a certain period of time is?
a. Ordinary annuity
b. Suspended annuity
c. Deferred annuity
Annuity due

115. A bond where the security behind it are the equipment of the issuing corporation.
a. Debenture
b. Mortgage
c. Collateral
d. Lien
116. It is the worth of a property as shown on the accounting records.
a. Resale value
b. Face value
c. Book value
d. Written value

117. It is usually determined by a disinterested third party to establish a price good enough to both
the seller and the buyer.
a. Fair value
b. Market value
c. Common value
d. Safe value

118. It is the sum of the first cost and the present worth of all costs or replacement, operation
and maintenance.
a. Total cost
b. Capitalized cost
c. Initial cost
d. Variable cost

119. What the property is worth to the owner as an operating unit.

a. Utility value
b. Present value
c. Salvage value
d. Resale value

120. In making economy studies a minimum required profit on the invested capital is included as
a cost. A method called as .
a. Rate of return
b. Annual cost pattern
c. Present worth pattern
d. Capital cost

121. A debt of P 1000 is to be paid off in 5 equal yearly payments, each combining an amortization
installment and interest at 4% on the previously unpaid balance of the debt. What should be the
amount of each payment?
a. P 220.50
b. P 224.62
c. P 242.61
d. P 222.50

122. What is the interest due on a P 1500 note for 4 years and 3 month, if it bears 12%
ordinary simple interest?
a. P 756
b. P 765
c. P 675
d. P 576

123. A company sets aside P 300,000 each year as a fund for expansion. If the fund earns 9%
compounded annually, determine how long will it take before a building costing P 3, 000, 000 can be
built?
a. 7.34 years
b. 7.44 years
c. 7.20 years
d. 7.54 years

END OF 245
 247. An amortization of a debt is in a form of a gradient series of P5,000 on the first year, P4,500 on the
second year, P4,000 on the third year, P3,500 on the fourth year. What is the equivalent uniform periodic
payment if interest is 5%?
A. P4,280.47
B. P4,378.17
C. P4,259.68
D. P4,325.12

249. Which of the following depreciation methods cannot have a salvage value of zero?
A. Declining balance method
B. Sinking fund method
C. Straight line method
D. SYD method

251. A price tag of P1200 is specified if paid within 60 days but offers a 3% discount for cash in 30 days.
Find the rate of interest.
A. 37.11%
B. 40.21%
C. 38.51%
D. 39.31%

253. Mr. J. Dela Cruz borrowed money from the bank. He received from the bank P1,340.00 and promised
to pay P1,500.00 at the end of 9 months. Determine the simple interest rate and the corresponding discount
rate or often referred to as the “Banker’s Discount”.
A. 15.92% ; 13.73%
B. 12.95% ; 17.33%
C.18.28% ; 13.12%
D. 19.25% ; 13.33%

255. Karen was granted a loan of P20,000 by her employer CPM Industrial Fabricator and Construction
Corporation with an interest at 6% for 180days on the principal collected in advance. The corporation would
accept a promissory note for P20,000 non-interest for 180days. If discounted at once, find the proceeds in the
note.
A. P18,800
B. P18,000
C. P19,000
D. P18,400

257. Mr. Bautista made a money market placement of P1,000,000 for 30 days at 7.5% per year. If
withholding tax is 20%, what is the net interest that Mr. Bautista will receive at the end of the month?
A. P3,000
B. P6,000
C. P4,000
D. P5,000

259. In buying a computer disk, the buyer was offered the options of paying P250 cash at the end of 30days
or P270 at the end of 120days. At what rate is the buyer paying simple interest if he agree to pay at the end of
120days?
A. 32%
B. 28% C.40%
D. 25%
261. A deposit of P110,000 was made for 31days. The net interest after deducting 20% withholding
tax is P890.36. Find the rate of return annually.
A. 12.25
B. 12.75
C. 11.75
D. 11.95

263. A man borrowed P2000 from a bank and promise to pay the amount for 1year. He received only the
amount of P1,920 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?
A. 4% ; 4.17%
B. 4% ; 4.71%
C. 3% ; 3.17%
D. 3% ; 3.71%

265. A man is required to pay P200 at the end of 160 days or P190 at the end of 40 days. Determine the
rate of interest.
A. 18.4%
B. 15.8%
C. 19.6%
D. 16.4%

267. The amount of P12800 in 4years at 5% compounded quarterly is .

A. P14,785.34
B. P16,311.26
C. P15,614.59
D. P15,847.33

269. A nominal interest of 3% compounded continuously is given on the account. What is the accumulated
amount of P10,000 after 10 years?
A. P13,610.10
B. P13,498.60
C. P13,500.10
D. P13,439.16

271. A man expects to receive P25,000 in 8 years. How much is that worth now considering interest at 8%
compounded quarterly?
A. P13,859.12
B. P13,675.23
C. P13,958.33
D. P13,265.83

273. If the nominal interest rate is 3%, how much is P5000 worth in 10 years in a continuously
compounded account?
A. P5750
B. P7500
C. P6750
D. P6350

275. How many years will P100,000 earn a compound interest of P50,000 if the interest rate is 9%
compounded quarterly?
A. 3.25 years
B. 5.86 years
C. 4.55 years
D. 2.11 years
For Problems 277-279:
When compounded Bi-monthly, P15000 becomes P22,318.30 after 5years.

277. What is the nominal rate of interest?

A. 7%
B. 9%
C. 8%
D. 10%

279. What is the effective rate if it is compounded quarterly?

A. 7.28%
B. 9.28%
C. 8.28%
D. 10.28%

281. Compute the effective annual interest rate which is equivalent to 5% nominal annual interest
compounded continuously.
A. 5.13%
B. 5.26%
C. 4.94%
D. 4.90%

283. A man wishes to have P40,000 in a certain fund at the end of 8 years. How much should he invest in a
fund that will pay 6% compounded continuously?
A. P24,751.34
B. P28,864.36
C. P36,421.44
D. P30,468.42

285. What is the nominal rate of interest compounded continuously for 10 years if the compound
amount factor is equal to 1.34986?
A. 3%
B. 5%
C. 4%
D. 6%

287. If the nominal interest is 12% compounded continuously, compute the effective annual rate if interest.
A. 12.75%
B. 12.40%
C. 11.26%
D. 11.55%

289. If the effective rate is 24%, what nominal rate of interest is charged for a continuously compounded
loan?
A. 21.51%
B. 23.25%
C. 22.35%
D. 21.90%

291. What is the difference of the amount 3 years from now for a 10% simple interest and 10%
compound interest per year? (P5000 accumulated)
A. P155
B. same
C. P100
D. P50
293. If a sum of money triples in a certain period of time at a given rate interest, compute the value of the
single payment present worth factor.
A. 0.333
B. 0.292
C. 3.000
D. 1.962

295. If the single payment present worth factor for a period of 8 years is equal to 0.58201, compute the
nearest value of the rate of interest for that period.
A. 6%
B. 5%
C. 7%
D. 8%

297. A sum of P1,000 is invested now and left for 8 years, at which time the principal is withdrawn. The
interest has an accrued left for another 8 years. If the effective annual interest is 5%, what will be the
withdrawn amount at the end of the 16th year?
A. P507.42
B. P750.42
C. P705.42
D. P425.07

For problems 298 - 300:

Compute the interest for an amount of P200,000 for a period of 8 years.

299. If it was made at 16% compounded bi-monthly.

A. P507,267.28
B. P407,283.01
C. P507,365.96
D. P459,923.44

301. Find the value of x, (F/P, x, 6) if F/P compounded quarterly is equal to 1.612226.
A. 7%
B. 5%
C. 8%
D. 6%

303. Find the rate of interest if compound amount factor compounded bi-monthly for 5 years is equal
to 1.487887.
A. 7%
B. 5%
C. 8%
D. 6%

305. Compute the equivalent compound amount factor if it is compounded continuously.

A. 1.61607
B. 1.24532
C. 1.24282
D. 0.24245
307. A man loan P2000 from the bank. How long would it take in years for the amount of the loan and
interest to equal P3280 if it was made at 8% simple interest.
A. 7 years
B. 5 years
C. 8 years
D. 6 years

309. A man loan P2000 from the bank. How long would it take in years if it was made at 8% compounded
continuously.
A. 7.18 years
B. 5.18 years
C. 8.18 years
D. 6.18 years

311. How long would it take your money to double itself if it is invested at 6% simple interest, compounded
semi-quarterly, and compounded continuously?
A. 12.67 yrs ; 11.2 yrs ; 15.05 yrs
B. 18.67 yrs ; 11.6 yrs ; 11.24 yrs
C. 16.67 yrs ; 11.6 yrs ; 11.55 yrs
D. 17.67 yrs ; 10.2 yrs ; 11.45 yrs

313. Compute for its compound interest if it is invested at 10% compounded annually.
A. P16,550.00
B. P15,000.00
C. P17,492.94
D. P14,242.15

315. What is the nominal rate of interest if it is compounded quarterly?

A. 8.00%
B. 7.00%
C. 8.24%
D. 7.96%

317. What is the equivalent nominal rate if it is compounded semi-quarterly?

A. 8.00%
B. 7.00%
C. 8.24%
D. 7.96%

319. What is the value of (P/F, 6%, 4) if it is compounded bi-monthly.

A. 0.524273541
B. 1.487886717
C. 0.787566127
D. 1.612226000

321. What is the effective rate if it is compounded continuously?

A. 8.33%
B. 9.33%
C. 8.93%
D. 9.93%
323. What is the value of the present worth factor if it is compounded continuously?
A. 1. 272441
B. 0.272441
C. 1.726419
D. 0.726149

325. What is the effective rate of interest if it is compounded semi-annually of problem no. 324?
A. 5.00%
B. 7.24%
C. 6.92%
D. 6.09%

327. Money was invested at x% compounded quarterly. If it takes money to quadruple in

17.5 years, find the value of x.
A. 6.23%
B. 8.00%
C. 5.92%
D. 9.78%

329. What is the equivalent rate if problem no. 327 is compounded daily?
A. 7.24%
B. 7.92%
C. 8.24%
D. 8.87%

331. How much is he going to pay at the end of 5 years if it was made at 12% compound semiquarterly?
A. P800,000.00
B. P911,059.20
C. P823,243.09
D. P907,009.21

333. P60,000 was deposited at 6% compounded quarterly, tax free for 9 years and 3 months. How much
interest was earned at the end of the period?
A. P43,214.24
B. P44,086.60
C. P43.242.24
D. P44,215.60

335. P200,000 was placed in a time deposit at x% compounded quarterly and was free of taxes. After
exactly 5 years, the total interest earned was P120,000. What is the value of x?
A. 9.5%
B. 6.35%
C. 8.21%
D. 7.12%

337. It takes 20.15 years to quadruple your money if it is invested at x% compounded semi- annually. Find
the value of x.
A. 8%
B. 7%
C. 6%
D. 5%
339. Money was invested at x% compounded quarterly. If it takes the money into quadruple in 17.5 years,
find the value of x.
A. 8%
B. 7%
C. 6%
D. 5%

341. You borrow P3,500.00 for one year from a friend at an interest rate of 1.5% per month instead of
taking a loan from a bank at a rate of 18% per year. Compare how much money you will save or lose on the
transaction.
A. pay P155 more if you borrowed from the bank
B. save P55 by borrowing from your friend
C. pay P85 more if you borrowed from the bank
D. save P95 by borrowing from your friend

343. An initial savings deposit of P80,000 in a certain bank earns 6% interest per annum compounded
monthly. If the earnings from the deposit are subject to a 20% tax, what would the net value of the deposit be
after three quarters?
A. P95,324.95
B. P68743.24
C. P82938.28
D. P56244.75

345. The amount of P50,000 was deposited in a bank earning an interest of 7.5% per annum. Determine the
total amount at the end of 5 years, if the principal and interest were not withdrawn during the period.
A. P71,781.47
B. P70,374.90
C. P72,475.23
D. P78,536.34

347. If P1,000 becomes P1,126.49 after 4 years when invested at a certain nominal rate of interest
compounded semi-annually, determine the nominal rate and the corresponding effective rate.
A. 3.00% and 3.02%
B. 2.30% and 2.76%
C. 4.29% and 4.32%
D. 3.97% and 3.95%

349. What is the corresponding effective interest rate of 18% compounded semi-quarterly?
A. 19.25%
B. 18.46%
C. 19.48%
D. 18.95%

351. A couple borrowed P4,000 from a lending company for 6 years at 12%. At the end of 6 years, it
renews the loan for the amount due plus P4,000 more for 3 years at 12%. What is the lump sum due?
A. P14,842.40
B. P12,316.40
C. P16,712.03
D. P15,382.60

353. P200,000 was deposited on Jan. 1,1988 at an interest rate of 24% compounded semi- annually. How
much would the sum be on Jan. 1, 1993?
A. P421,170
B. P401,170
C. P521,170
D. P621,170

355.P200,000 was deposited at an interest rate of 24% compounded semi-annually. After how
many years will the sum be P621,170?
A. 4 years
B. 5 years
C. 3 years
D. 6 years

357. A marketing company established a program to replace the cars of its sales representatives at the end
of every 5 years. If the present price of the approved type of car is P520,000.00 with a resale value at the end
of 5 years of 60% its present value, how much money must the company accumulate for 5 years if inflation
annually is 10%. Release value will also appreciate at 10% yearly.
A. P120,289.51
B. P110,297.27
C. P129,382.38
D. P122,265.69

359. A machine has been purchased and installed at a total cost of P18,000.00. The machine will be retired
at the end of 5 years, at which time it is expected to have a scrap value of P2,000.00 based on current prices.
The machine will then be replaced with an exact duplicate. The company plans to establish a reserve fund to
accumulate the capital needed to replace the machine. If an average annual rate of inflation of 3% is
anticipated, how much capital must be accumulated?
A. P15,030.00
B. P12,382.00
C. P18,548.39
D. P15,386.00

361. A man bought a government bond which cost P1000 and will pay P50 interest each year for 20 years.
The bond will mature at the end of 20 years and he will receive the original P1000. If there is 2% annual
inflation during this period, what rate of return will the investor receive after considering the effect of
inflation?
A. 2.94%
B. 4.25%
C. 3.16%
D. 5.16%.

363. 12% rate of interest can take care of the cost of money and inflation. If the nominal rate of interest is
6%, what is the rate of inflation?
A. 6.62%
B. 7.67%
C. 5.66%
D. 4.64%

365. A small machine costing P80,000 has a salvage value of x at the end of its life of 5 years. The book value
at the end of the 4th year is P22,400. What is the value of x using the straight line method depreciation?
A. P6000
B. P8000
C. P7000
D. P9000

367. A manufacturing plant was built at a cost of P5M and is estimated to have a life of 20 years with a
salvage value of P1M. A certain equipment worth P570,000 was installed at a cost of P80,000 is expected to
operate economically for 15 years with a salvage value of P50,000. Determine the book value of the plant
and equipment after 10 years, use straight line depreciation method.
A. P3,250,000
B. P4,250,000
C. P3,750,000
D. P4,500,000

369. The cost of the printing equipment is P500,000 and the cost of handling and installation is P30,000. If
the book value of the equipment at the end of the 3rd year is P242,000 and the life of the equipment is
assumed to be 5 years, determine the salvage value of this equipment at the end of 5 years.
A. P50,000
B. P53,000
C. P60,000
D. P64,000

371. The cost of equipment is P500,000 and the cost of installation is P30,000. If the salvage value is 10% of
the cost of equipment at the end of 5 years, determine the book value at the end of the fourth year. Use
straight line method.
A. P155,000
B. P146,000
C. P140,000
D. P132,600

For Problems 172-174:

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 years.
Determine the total depreciation after 3 years.

373. Using Sum of Years Digit Method

A. P1,150,000
B. P1,300,000
C. P1,200,000
D. P1,350,600

375. An asset is purchased for P9,000.00. Its estimated economic life is 10 years after which it will be sold for
P1,000.00. Find the depreciation in the first three years using straight line method.
A. P2,500
B. P3,000
C. P2,400
D. P2,000

377. A machine has an initial cost of P50,00.00 and a salvage value of P10,000.00 after 10 years. What is
the straight line method depreciation rate as a percentage of the initial cost?
A. 10%
B. 12%
C. 8%
D. 9%

379. A machine has a first of P80,000 and a salvage of P2,000 at the end of its life of 10 years. Find the book
value at the end of the 6th year using straight line method of depreciation.
A. P33,200
B. P34,300
C. P35,400
D. P32,900

381. A telephone company purchased a microwave radio equipment for P6M. Freight and installation
charges amounted to 3% of the purchased price. If the equipment shall be depreciated over a period of 8
years with a salvage value of 5%, determine the depreciation charge during the 5th year using the Sum of
Year Digit Method.
A. P756,632.78
B. P652,333.33
C. P957,902.56
D. P845, 935.76

383. A machine cost P7,350 has a life of 8 years and has a salvage value of P350 at the end of 8 years.
Determine its book value at the end of 4 years using sum years digit method.
A. P3,476.90
B. P6,543.21
C. P2,294.44
D. P5,455.01

385. A company purchased an asset for P10000 and plans to keep it for 20 years. If the salvage value is
zero at the end of the 20th year, what is the depreciation in the third year? Use sum of years digit method.
A. P1000
B. P938
C. P857
D. P747

387. ABC Corporation makes it policy that for every new equipment purchased, the annual depreciation
should not exceed 20% of the first cost at any time without salvage value. Determine the length of service if
the depreciation used is the SYD Method.
A. 9 years
B. 12 years
C. 10 years
D. 19 years

389. A machine costing P720,000 is estimated to have a life of 10 years. If the annual rate of depreciation is
25%, determine the total depreciation using a constant percentage of the declining balance method.
A. P679,454.27
B. P532,825.73
C. P432,725.45
D. P764,243.33

391. A certain office equipment has a first cost of P20,000 and has a salvage value of P1,000 at the end of
10 years. Determine the depreciation at the end of the 6th year using Sinking fund method at 3% interest.
A. P10,720
B. P11,680
C. P12,420
D. P9,840

393. An equipment costs P8,000 has an economic life of 8 years and salvage value of P400 at the end of 8
years. The first year depreciation amounts to P1,688.89. What method is used in the calculation of the
depreciation?
A. Straight Line
B. Declining Balance
C. Sinking Fund
D. Sum of Years Digit

395. A machine has a first cost of P140,000 and a life of 8 years with a salvage value of P10,000 at the
end of its useful life. If the depreciation at the first year amounts to P35,000, what method is used in the
calculation of depreciation?
A. Double Declining Balance
B. Straight Line
C. Declining Balance
D. Sum of Years Digit

397. An equipment costs P480,000 and has a salvage value of 10% of its cost at the end of its economic life
of 35,000 operating hours. In the first year, it was used for 4,000 hours. Determine its book value at the end of
the first year.
A. P430,629.00
B. P418,360.00
C. P380,420.00
D. P376,420.00

399. A certain machine cost P40,000 and has a life of 4 years and a salvage value of P5000. The production
output of this machine in units per year is 1000 units for the first year, 2000 units for the second year, 3000
units for the third year, and 4000 units for the fourth year. If the units produced are in uniform quality, what is
the depreciation charge at the end of the fourth year.
A. P14,000
B. P15,000
C. P13,000
D. P16,000

401. It is defined to be the capacity of a commodity to satisfy human want

A. Necessity
B. Utility
C. Luxuries
D. Discount

403. It is an amount which a willing buyer will pay to a willing seller for the property where each has equal
advantage and is under no compulsion to buy or sell.
A. Book value
B. Market value
C. Use value
D. Fair value

405. An economic condition in which there are so few suppliers of a particular product that
one supplier’s actionssignificantly affect prices and supply.
A. Oligopoly
B. Monopsony
C. Monopoly
D. Perfect competition

407. It is the worth of a property as recorded in the book of an enterprise.

A. Salvage value
B. Price
C. Book value
D. Scrap value

409. A formal organization of producers within industry forming a perfect collusion purposely formed to
increase profit and block new comers from the industry.
A. Cartel
B. Monopoly
C. Corporation
D. Competitors

411. A market situation where there is one seller and buyer.

A. Bilateral monopoly
B. Monopoly
C. Oligopoly
D. Bilateral Monopoly

413. A series of equal payments made at equal interval of time.

A. Annuity
B. Amortization
C. Depreciation
D. Bonds

415. The place where buyers and sellers come together.

A. Maker
B. Store
C. Bargain center
D. Port

417. A market situation in which two competing buyers exert controlling influence over many sellers.
A. Bilateral monopoly
B. Oligopoly
C. Duopsony
D. Duopoly

419. The type of annuity where the first payment is made after several periods, after the beginning of
the payment.
A. Perpetuity
B. Ordinary annuity
C. Annuity due
D. Deferred annuity

421. The amount which has been spent or capital invested which for some reasons cannot be retrieved.
A. Sunk cost
B. Fixed costs
C. Depletion cost
D. Construction cost

423. The sum of all the costs necessary to prepare a construction project for operation.
A. Operation costs
B. Construction cost
C. Depletion cost
D. Production cost

425. The amount that the property would give if sold for junk.
A. Junk value
B. Salvage value
C. Scrap value
D. Book value

427. The sum of the direct labor cost incurred in the factory and the direct material cost of all materials that
go into production is called
A. Net cost
B. Maintenance cost
C. Prime cost
D. Operating cost

429. The addition cost of producing one more unit is

A. Prime cost
B. Marginal cost
C. Differential cost
D. Sunk cost

431. Estimated value of the property at the useful life.

A. Market value
B. Fair value
C. Salvage value
D. Book value

433. This consists of a cash and account receivable during the next period or any other material which
will be sold.
A. Fixed assets
B. Deferred charges
C. Current asset
D. Liability

433. This consists of a cash and account receivable during the next period or any other material which
will be sold.
A. Fixed assets
B. Deferred charges
C. Current asset
D. Liability

437. The quantity of a certain commodity that is offered for sale at a certain price at a given place and time.
A. Utility
B. Supply
C. Stocks
D. Goods

439. Decreases in the value of a physical property due to the passage of time.
A. Deflation
B. Depletion
C. Declination
D. Depreciation

441. The simplest form of business organization where in the business is own entirely by one person.
A. Partnership
B. Proprietorship
C. Corporation
D. Joint venture

443. It is defined as the capacity of a commodity to satisfy human want.

A. Satisfaction
B. Luxury
C. Necessity
D. Utility

445. These are products or services that are desired by human and will be purchased if money is
available after the required necessities have been obtained.
A. Commodities
B. Necessities
C. Luxuries
D. Supplies

447. It is where the original record of a business transaction is recorded.

A. Ledger
B. Spreadsheet
C. Journal
D. Logbook

449. The right and privilege granted to an individual or corporation to do business in a certain region.
A. Permit
B. Royalty
C. License
D. Franchise

451. A bookstore purchased a best-selling book at P200.00 per copy. At what price should this book be
sold so that by giving a 20% discount, the profit is 30%.
A. P200.00
B. P300.00
C. P400.00
D. P500.00

453. A manufacturing firm maintains one product assembly line to produce signal generators. Weekly
demand for the generators is 35 units. The line operates for 7 hours per day, 5 days per week. What is the
maximum production time per unit in hours required of the line to meet the demand?
A.1 hour
B.1 hour and 10 minutes
C.1 hour and 15 minutes
D. 1 hour and 30 minutes

455. In determining the cost involved in fabricating sub-assembly B within a company, the following data
have been gathered:
Direct material - P0.30 per unit
Direct labor - P0.50 per unit
Testing set-up - P300.00 per set-up
It is decided to subcontract the manufacturing of assembly B to an outside company. For an order of 100 units,
what is the cost per unit that is acceptable to the company?
A. P3.80
B. P4.00
C. P4.10
D. P4.20

457. An equipment installation job in the completion stage can be completed in 50 days of 8 hour/day work,
with 50 men working. With the contract expiring in 40 days, the mechanical engineer contractor decided to
add 15 men on the job, overtime not being permitted.
If the liquidated damages is P5,000 per day of delay, and the men are paid P150 per day, how much money
would he save with the additional workers?
A. P43,450
B. P43,750
C. P44,250
D. P44,750

459. Jojo bought a second-hand Betamax VCR and then sold it to Rudy at a profit of 40%. Rudy then sold
the VCR to Noel at a profit of 20%. If Noel paid P2,856 more than it costs Jojo, how much did Jojo pay for the
unit?
A. P4,100
B. P3,900
C. P4,000
D. P4,200

461. A Mechanical Engineer who was awarded a P450,000 contract to install the machineries of an oil mill
failed to finish the work on time. As provided for in the contract, he has to pay a daily penalty equivalent to
one fourth of one per cent per day for the first 10 days and 0.5% per day for the next 10 days and one per cent
per day for everyday thereafter. If the total penalty was P60,750.00, how many days was the completion of
the contract delayed?
A. 26 days
B. 27 days
C. 28 days
D. 29 days

463. A man would like to invest P50,000 in government bonds and stocks that will give an overall annual
return of about 5%. The money to be invested in government bonds will give an annual return of 4.5% and the
stocks of about 6%. The investments are in units of P100.00 each. If he desires to keep his stock investment to
minimum in order to reduce his risk, determine how many stocks should be purchased.
A. 165
B. 166
C. 167
D. 168

465. An 8-meter concrete road pavement 500 meters long is desired to be constructed over a wellcompacted
gravel road, together with the necessary concrete curbs and gutters on both sides. In order to put
the subgrade on an even level grade, a 500 cubic meters of sand filling is necessary, over which the 10 inch
concrete pavement will be placed?
Assume the following data:
A. Sand fill, including rolling and watering = P100 per cubic meter
B. Concrete pavement, 10 in thick (labor and materials) including curing = P220 per sq. Meter
C. Curbs and gutters = P12 per linear meter
How much will the project cost allowing 15% for contingency?
A. P1,207,000
B. P1,207,500
C. P1,208,000
D. P1,208,500
469. A call to bid was advertised in the Philippine Daily Inquirer for the construction of a transmission line
from a mini-hydroelectric power plant to the substation which is 5.035 kilometers away. The tanalized timber
electrical posts must be placed at an interval of 50 m. The electrical posts must be 30 feet long, 8 inches in
diameter at the tip and 12 inches in diameter at the butt. The power house is 15 m from the first electric post
and the substation is 20 m from the last electric post. Compute the estimated cost for the project using the
following data:
Cost of one tanalized timber post 30 feet long is P5,000 including delivery to the site. Labourer at P180 per day
and 5 laborers can dig and erect 3 posts per day. Electrician at P250 per day and 4 electricians can strung
wires complete 150 meters per day. Electric wire cost P4.00 per meter. Use only 5 laborers and 4 electricians
for the project and is supervised by a foreman which is paid at P400 per day. Contingency is 10% and profit is
25%.
A. P745,890.23
B. P817,692.00
C. P789,120.80
D. P829,592.50

471. The monthly demand for ice cans being manufactured by Mr. Alarde is 3200 pieces. With a manual
operated guillotine, the unit cuffing cost is P25.00. An electrically operated hydraulic guillotine was offered to
Mr. Alarde at a price of P275,000.00 and which cuts by 30% the unit cuffing cost. Disregarding the cost of
money, how many months will Mr. Alarde be able to recover the cost of the machine if he decides to buy
now?
A. 10 months
B. 11 months
C. 12 months
D. 13 months.

473. A paint manufacturing company uses a sand mill for fine grinding of paint with an output of 100 liters
per hour using glass beads as grinding media. Media load in the mill is 25 kg costing P200.00 per kg and is fully
replenished in 2 months time at 8 hours per day operation, 25 days a month. A ceramic grinding media is
offered to this paint company, costing P400 per kg and needs 30 kg load in the sand mill, but guarantees an
output of 120 liters per hour and full replenishment of media in 3 months. If profit on paint reduction is P15
per liter how much is a difference in profit between the two media?
A. P436,900
B. P462,000
C. P473,000
D. P498,200

475. You loan from a loan firm an amount of P100,000 with a rate of simple interest of 20% but the
interest was deducted from the loan at the time the money was borrowed. If at the end of one year, you have
to pay the full amount of P100,000, what is the actual rate of interest?
A. 23.5%
B. 24.7%
C. 25.0%
D. 25.8%

477. If you borrowed money from your friend with simple interest at 12%, find the present worth of
P50,000, which is due at the end of 7 months.
A. P46,728.97
B. P47,098.12
C. P47,890.12
D. P48,090.21

479. If you borrowed P10,000 from a bank with 18% interest per annum, what is the total amount to be
repaid at the end of one year?
A. P10,900
B. P11,200
C. P11,800
D. P12,000
481. A man borrowed P2,000 from a bank and promised to pay the amount for one year. He received only
the amount of P1,920 after the bank collected an advance interest of P80.00. What was the rate of discount?
A. 3.67%
B. 4.00%
C. 4.15%
D. 4.25%

483. What will be the future worth of money after 12 months if the sum of P25,000 is invested today
at simple interest rate of 1% per year?
A. P25,168
B. P25,175
C. P25,189
D. P25,250

485. 480 It is the practice of almost all banks in the Philippines that when they grant a loan, the interest for
one year is automatically deducted from the principal amount upon release of money to a borrower. Let us
therefore assume that you applied for a loan with a bank and the P80,000 was approved at an interest rate of
14% of which P11,200 was deducted and you were given a check of P68,800. Since you have to pay the
amount of P80,000 one year after, what then will be the effective interest rate?
A. 16.02%
B. 16.28%
C. 16.32%
D. 16.47%

487. P5,000 is borrowed for 75 days at 16% per annum simple interest. How much will be due at the end
of 75 days?
A. P5,066.67
B. P5,133.33
C. P5,050.00
D. P5,166.67

489. A man borrowed P20,000 from a local commercial bank which has a simple interest of 16% but the
interest is to be deducted from the loan at the time that the money was borrowed and the loan is payable at
the end of one year. How much is the actual rate of interest?
A. 19.05%
B. 19.34%
C. 19.67%
D. 19.87%

491. Agnes Abanilla was granted a loan of P20,000 by her employer CPM Industrial Fabricator and
Construction Corporation with an interest rate 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 proceeds of the note.
A. P18,800
B. P18,900
C. P19,000
D. P19,100

493. A man borrowed from a bank under a promissory note that he signed in the amount of P25,000.00 for
a period of one year. He receives only the amount of P21,915.00 after the bank collected the advance interest
and an additional of P85.00 for notarial and inspection fees. What was the rate of interest that the bank
collected in advance?
A. 13.05%
B. 13.22%
C. 13.46%
D. 13.64%

495. Mr. J. Dela Cruz borrowed money from a bank. He receives from the bank P1,340.00 and promised to
pay P1,500.00 at the end of 9 months. Determine the corresponding discount rate or often referred to as the
“banker’s discount.”
A. 13.15%
B. 13.32%
C. 13.46%
D. 13.73%

497. A man borrowed money from a loan shark. He receives from the loan shark and amount of P1,342.00
and promised to repay P1,500.00 at the end of 3 quarters. What is the simple interest rate?
A. 15.47%
B. 15.69%
C. 15.80%
D. 15.96%

499. The exact simple interest of P5,000 invested from June 21,1995 to December 25,1995 is P100. What is
the rate of interest?
A. 3.90%
B. 3.92%
C. 3.95%
D. 3.98%

501. On her recent birthday, April 22, 2001, Nicole was given by her mother a certain sum of money as
birthday present. She decided to invest the said amount on 20% exact simple interest. If the account will
mature on Christmas day at an amount of P10,000.00, how much did Nicole receive from her mother on her
birthday?
A. P8,807.92
B. P8,827.56
C. P8,832.17
D. P8,845.78

503. Nicole has P20,400 in cash. She invested it at 7% from March 1, 2006 to November 1,
2006 at 7% interest. How much is the interest using the Banker’s Rule?
A. P972.12
B. P970.78
C. P973.12
D. P971.83

505.
A loan for P50,000 is to be paid in 3 years at the amount of P65,000. What is the effective rate
of money?
A. 9.01%
B. 9.14%
C. 9.31%
D. 9.41%

507.
Find the present worth of a future payment of P80,000 to be made in six years with an interest of 12%
compounded annually.
A. P40,540.49
B. P40,450.49
C. P40,350.49
D. P40,530.49
509.
What nominal rate, compounded semi-annually, yields the same amount as 16% compounded
quarterly?
A. 16.09%
B. 16.32%
C. 16.45%
D. 16.78%

511.
Find the nominal rate, which if converted quarterly could be used instead of 12% compounded
semi-annually.
A. 11.83%
B. 11.09%
C. 11.65%
D. 11.25%

513.
Find the compound amount if P2,500 is invested at 8% compounded quarterly for 5 years and 6
months.
A. P3,864.95
B. P3,846.59
C. P3,889.95
D. P3,844.95

515.
If P5,000 shall accumulate for 10 years at 8% compounded quarterly, then what is the compound
interest at the end of 10 years?
A. P6,080.40
B. P6,020.40
C. P6,040.20
D. P6,060.20

517.
Find the present worth of a future payment of P100,000 to be made in 10 years with an interest of 12%
compounded quarterly.
A. P30,555.68
B. P30,656.86
C. P30,556.86
D. P30,655.68

519.
The amount of P150,000 was deposited in the bank earning an interest of 7.5% per annum.
Determine the total amount at the end of 5 years, if the principal and interest were not withdrawn during the
period.
A. P215,344.40
B. P213,544.40
C. P234,153.40
D. P255.443.10

521.
What is the corresponding effective interest rate of 18% compounded semi-monthly?
A. 19.35%
B. 19.84%
C. 19.48%
D. 19.64%
523.
At an interest rate of 10% compounded annually, how much will a deposit of P1,500 be in 15 years?
A. P6,265.87
B. P6,256.78
C. P6,526.87
D. P6,652.78

525.
About how many years will P100,000 earn a compound interest of P50,000 if the interest rate is
9% compounded quarterly?
A. 4 years
B. 5 years
C. 6 years
D. 7 years

527.
What is the amount of P12,800 in 4 years at 5% compounded quarterly?
A. P15,461.59
B. P15,146.95
C. P15,641.59
D. P15,614.59

529.
If P50,000 shall accumulate for 10 years at 4% compounded quarterly, find the compounded
interest at the end of 10 years.
A. P2,333.32
B. P2,444.32
C. P2,555.32
D. P2,666.32

531.
P1,500.00 was deposited in a bank account, 20 years ago. Today, it is worth P3,000.00. Interest is paid
semi-annually. Determine the interest rate paid on this account.
A. 2.9%
B. 3.0%
C. 3.2%
D. 3.5%

533.
A man borrowed P100,000 at the interest rate of 12% per annum, compounded quarterly.
What is the effective rate?
A. 12.75%
B. 12.55%
C. 12.45%
D. 12.35%

535.
When will an amount be tripled with an interest of 11.56%?
A. 9 years
B. 10 years
C. 11 years
D. 12 years
537.
How much must be invested on January 1, 1998 in order to accumulate P2,000 on January 1,
2003? Money is worth 6%.
A. P1,509.34
B. P1,249.64
C. P1,378.98
D. P1,494.52

539.
A mechanical engineer wishes to accumulate a total of P10,000 in a savings account at the end of 10
years. If the bank pays only 4% compounded quarterly, what should be the initial deposit?
A. P6,176.35
B. P6,761.35
C. P6,716.53
D. P6,167.35

541.
If P500,000 is deposited at a rate of 11.25% compounded monthly, determine the compounded
interest after 7 years and 9 months.
A. P690,848.73
B. P670,651.23
C. P680,649.56
D. P685,781.25

543.
You borrow P3,500.00 for one year from a friend at an interest rate of 1.5% per month instead of
taking a loan from a bank at a rate of 18% per year. How much lesser you will pay by borrowing the money
from the bank?
A. P53.89
B. P54.66
C. P53.78
D. P54.98

545.
Fifteen years ago P1,000.00 was deposited in a bank account, and today it is worth P2,370.00. The
bank pays interest semi-annually. What was the interest rate paid in this account?
A. 5.72%
B. 5.78%
C. 5.84%
D. 5.90%

547.
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. P150.56
B. P152.88
C. P153.89
D. P151.09

549.
A firm borrows P2,000 for 6 years at 8 %. At the end of 6 years, it renews the loan for the amount
due plus P2,000 more for 2 years at 8%. What is the lump sum due?
A. P3,260.34
B. P3,280.34
C. P3,270.34
D. P3,250.34
551.
What is the effective rate corresponding to 16% compounding daily? Take 1 year = 360 days.
A. 17.35%
B. 17.45%
C. 17.55%
D. 17.65%

553.
P200,000 was deposited at an interest rate of 24% compounded semi-annually. After how many
years will the sum be P621,170?
A. 4 years
B. 5 years
C. 6 years
D. 7 years

555.
A company invests P10,000 today to be repaid in 5 years in one lump sum at 12% compounded
annually. How much profit in present day pesos is realized?
A. P7,563.29
B. P7,498.20
C. P7,340.12
D. P7,623.42

557.
How much should you put into a 10% savings account in order to have P10,000.00 in five years?
A. P6,216.21
B. P6,212.12
C. P6,218.21
D. P6,209.21

559.
P500,000 was deposited 20.15 years ago at an interest rate of 7% compounded semi- annually. How
much is the sum now?
A. P2,000,033.33
B. P2,000,166.28
C. P2,001,450.23
D. P2,002,820.12

561.
Alexander Michael owes P25,000.00 due in 1 year and P75,000 due in 4 years. He agrees to pay
P50,000.00 today and the balance in 2 years. How much must he pay at the end of two years if money is worth
5% compounded semi-annually?
A. P39,015.23
B. P39,026.25
C. P39,056.21
D. P39,089/78

563.
If money is worth 5% compounded quarterly, find the equated time for paying a loan of P150,000 due
in 1 year and P280,000 due in 2 years.
A. 1.52 years
B. 1.64 years
C. 1.69 years
D. 1.72 years
565.
A couple decided that for every child that will be born to them they will place a deposit in the bank so
that on the child’s 18th birthday, the child will receive the amount of P300,000.00. If the bank will pay an
interest of 18% compounded yearly, how much deposit will the couple have to make on the birth of a child to
them?
A. P15,367.18
B. P15,249.13
C. P15,722.16
D. P15,482.64

567.
A man who won P300,000 in a lottery decided to place 50% of his winning in a trust fund for the college
education of his son. If the money will earn 14% per year compounded quarterly, how much will the man have
at the end of 10 years when his son will be starting his college education?
A. P593,120.12
B. P593,452.12
C. P592,739.96
D. P593,888.96

569.
The Philippine Society of Mechanical Engineers is planning to put up its own building. Two proposals
being considered are:
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.
c.
By how much is proposal B more economical than proposal A if interest rate is 20% and depreciation is to be
neglected?
A. P19,122.15
B. P19,423.69
C. P19,518.03
D. P19,624.49

571.
A master card compounds monthly and charges an interest of 1.5% per month. What is the effective
interest rate per year?
A. 19.23%
B. 19.45%
C. 19.56%
D. 19.65%

573.
Microsoft CEO, billionaire Bill Gates willed that a sum of $25 million be given to a child but will be held
in trust by the child’s mother until it amounts to $45 million. If the amount is invested and earns 8%
compounded quarterly, when will the child receive the money?
A. 8.11 years
B. 7.90 years
C. 7.42 years
D. 7.24 years

575.
How long will it take money to triple itself if invested at 8% compounded annually?
A. 14.27 years
B. 14.56 years
C. 14.78 years
D. 14.98 years
577.
What is the present worth of a future payment of P200,000 to be made in 10 years with an interest of
10% compounded annually?
A. P76,901.21
B. P77,108.66
C. P78,109.32
D. P79,667.32

579.
What nominal rate compounded annually would quadruple the principal in 4 years?
A. 41.42%
B. 40.81%
C. 41.79%
D. 40.45%

581.
Suppose that P100,000 is invested at a certain rate of interest compounded annually for 2 years. If the
accumulated interest at the end of 2 years is P21,000. Find the rate of interest.
A. 10.12%
B. 10.00%
C. 10.92%
D. 10.32%

583.
Robin Padilla possesses a promissory note, due in 2 years hence, whose maturity value is P3,200.
What is the discount value of this note, based on an interest rate of 7%?
A. P2,795.00
B. P2,975.00
C. P2,579.00
D. P2,759.00

585.
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.
A. P201,689.91
B. P201,571.91
C. P201,345.91
D. P201,869.91

587.
A manufacturing firm contemplates retiring an existing machine at the end of 2002. The new machine
to replace the existing one will have an estimated cost of P400,000. This expense will be partially defrayed by
the sale of the old machine as scrap for P30,000. To accumulate the balance of the required capital, the firm
will deposit the following sum in an account earning interest at 5% compounded quarterly:
P60,000 at the end of 1999 P60,000 at the
end of 2000 P80,000 at the end of 2001
What cash disbursement will be necessary at the end of 2002 to purchase the new machine?
A. P155,890.12
B. P153,085.56
C. P154,200.12
D. P156,930.38
591.
Froyd Wess Network Inc. plans to purchase a piece of land and to build a school building on this land.
However, since the school building is not an immediate requirement, the institute is considering whether it
should purchase this land and build the building now or defer this action for 3 years. The current costs are as
follows:
Land: P800,000 Building: P12,000,000
The purchase price of the land and the cost of the school building are expected to appreciate at the rate of 15%
and 4% per annum, respectively. What will be the total cost of the land and structure 3 years hence?
A. P14,520,120
B. P14,715,068
C. P14,902,189
D. P15,021,781

593.
Mr. John Bongat working in the United States planned of returning to the Philippines at the end of
2001. He established a fund starting in 1995 with the following recorded deposits and withdrawals.
January 1, 1995 Deposit of P40,000
January 1, 1997 Deposit of P80,000
July 1, 1997 Withdrawal of P12,000
July 1, 1998 Deposit of P64,000
January 1, 1999 Withdrawal of P48,000
His fund earned interest at the rate of 3.5% compounded semiannually until the end of 1997. At that date, the
interest was augmented to 4% compounded semiannually. What will be the principal in the fund at the end of
2001?
A. P146,323.08
B. P146,992.99
C. P146,846.92
D. P146,022.82

595.
What is the future amount of P50,000 if the single payment compound amount factor of this investment
is 1.23%
A. P61,700
B. P61,900
C. P61,200
D. P61,500
597.
Mr. Mondragon invests P50,000 today. Several years later, it becomes P60,000. What is the single
payment present worth factor of this investment? If the amount was invested for 5 years, what is the rate of
interest?
A. 3.1%
B. 3.3%
C. 3.5%
D. 3.7%

599.
On January 1, 1999, Ms. Angel Locsin opened an account at Bank of Philippine Islands with an initial
deposit of P1,000,000.00. On March 1, 2000, she opened an additional P1,000,000.00. If the bank pays 12%
interest compounded monthly, how much will be in the account on April 1, 2000?
A. P2,180,968.95
B. P2,190,968.95
C. P2,160,968.95
D. P2,170,968.95

601.
Reduction in the level of national income and output usually accompanied by the fall in the general
price level.
A. Devaluation
B. Deflation
C. Inflation
D. Depreciation

603.
The place where buyers and sellers come together.
A. Market
B. Business
C. Recreation center
D. Buy and sell section

605.
It is a series of equal payments occurring at equal interval of time where the first payment is
made after several periods, after the beginning of the payment.
A. Perpetuity
B. Ordinary annuity
C. Annuity due
D. Deferred annuity

607.
Kind of obligation which has no condition attached.
A. Analytic
B. Pure
C. Gratuitous
D. Private

609.
An index of short term paying ability is called:
A. Receivable turn-over
B. Profit margin ratio
C. Current ratio
D. Acid-test ratio
611.
Estimated value at the end of the useful life.
A. Market value
B. Fair value
C. Salvage value
D. Book value

613.
Additional information of prospective bidders on contract documents issued prior to bidding date.
A. Delict
B. Escalatory
C. Technological assessment
D. Bid bulletin

615.
What is the present worth of a P500 annuity starting at the end of the third year and continuing to
the end of the fourth year, if the annual interest rate is 10%?
A. P727.17
B. P717.17
C. P714.71
D. P731.17

617.
What annuity is required over 12 years to equate with a future amount of P20,000?
Assume i = 6% annually.
A. P1,290.34
B. P1,185.54
C. P1,107.34
D. P1,205.74

619.
A manufacturer desires to set aside a certain sum of money to provide funds to cover the yearly
operating expenses and the cost of replacing every year the dyes of a stamping machine used in making
radio chassis as model changes for a period of 10 years.
Operating cost per year = P500.00 Cost of dye =
P1,200.00
Salvage value of dye = P600.00
The money will be deposited in a savings account which earns 6% interest. Determine the sum of money that
must be provided, including the cost of the initial dye.
A. P8,626.02
B. P8,662.02
C. P8,226.02
D. P8,666.22

621.
A man paid 10% downpayment of P200,000 for a house and lot and agreed to pay the 90% balance
on monthly installment for 60 months at an interest rate of 15% compounded monthly. Compute the
amount of the monthly payment.
A. P42,821.86
B. P42,128.67
C. P42,218.57
D. P42,812.68
623.
What is the accumulated amount of five-year annuity paying P6,000 at the end of each year, with
interest at 15% compounded annually?
A. P40,519.21
B. P40,681.29
C. P40,454.29
D. P40,329.10

625.
A man borrowed P300,000 from a lending institution which will be paid after 10 years at an interest rate
of 12% compounded annually. If money is worth 8% per annum, how much should he deposit to a bank
monthly in order to discharge his debt 10 yrs. hence?
A. P5,174.23
B. P5,162.89
C. P5,190.12
D. P5,194.23

627.
Money borrowed today is to be paid in 6 equal payments at the end of 6 quarters. If the interest is 12%
compounded quarterly, how much was initially borrowed if quarterly payment is P2,000.00?
A. P10,834.38
B. P10,278.12
C. P10,450.00
D. P10,672.90

629.
How much must you invest today in order to withdraw P2,000 annually for 10 years if the interest
rate is 9%?
A. P12,835.32
B. P12,992.22
C. P12,562.09
D. P12,004.59

631.
A piece of machinery can be bought for P10,000 cash or for P2,000 down and payments of P750 per
year for 15 years. What is the annual interest rate for the time payments?
A. 4.61%
B. 4.71%
C. 4.41%
D. 4.51%

633.
A house and lot can be acquired by a downpayment of P500,000 and a yearly payment of P100,000 at
the end of each year for a period of 10 years, starting at the end of 5 years from the date of purchase. If money
is worth 14% compounded annually, what is the cash price of the property?
A. P806,899.33
B. P807,100.12
C. P807,778.12
D. P808,835.92

635.
An instructor plans to retire in exactly one year and want an account that will pay him P25,000 a year
for the next 15 years. Assuming a 6% annual effective interest rate, what is the amount he would need to
deposit now? (The fund will be depleted after 15 years).
A. P242,860.22
B. P242,680.22
C. P242,608.22
D. P242,806.22
637.
A man purchased on monthly installment a P100,000 worth of land. The interest rate is 12% nominal
and payable in 20 years. What is the monthly amortization?
A. P1,101.08
B. P1,202.08
C. P1,303.08
D. P1,404.08

639.
An investment of P350,000 is made today and is equivalent to payments of P200,000 each year for 3
years. What is the annual rate of return on investment for the project?
A. 32.7%
B. 33.8%
C. 33.2%
D. 33.6%

641.
Mr. Cruz plans to deposit for the education of his 5 years old son, P500 at the end of each month for
10 years at 12% annual interest compounded monthly. The amount that will be available in two years is:
A. P13,100.60
B. P13,589.50
C. P13,982.80
D. P13,486.70

643.
An employee is about to receive the sum of P300.00 at the end of each year for 5 years.
One year prior to the receipt of the first sum, he decides to discount all 5 sum. If the interest rate is 6%, what
proceeds will he obtain?
A. P1,298.00
B. P1,231.09
C. P1,221.62
D. P1,263.71

645.
Mr. Padilla plans a deposit of P500 at the end of each month for 10 years at 12% annual interest,
compounded monthly. What will be the amount that will be available in 2 years?
A. P13,941.44
B. P13,272.22
C. P13,486.73
D. P13,089.32

647.
A man inherited a regular endowment of P100,000 every end of 3 months for 10 years. However, he
may choose to get a single lump sum payment at the end of 4 years. How much is this lump sum of the cost of
money is 14% compounded quarterly?
A. P3,702,939.73
B. P3,607,562.16
C. P3,799,801.23
D. P3,676,590.12

649.
You need P4,000 per year for four years to go to college. Your father invested P5,000 in 7% account for
your education when you were born. If you withdraw P4,000 at the end of your 17th, 18th, 19th and 20th
birthday, how much will be left in the account at the end of the 21st year?
A. P1,666.98
B. P1,699.86
C. P1,623.89
D. P1,645.67
651.
A machine is under consideration for investment. The cost of the machine is P25,000.00.
Each year it operates, the machine will generate a savings of P15,000.00. Given the effective annual interest
rate of 18%, what is the discounted payback period, in years, on the investment of the machine?
A. 3.15
B. 1.75
C. 2.15
D. 2.75

653.
Engr. Santos borrows P100,000.00 at 10% effective annual interest. He must pay back the loan over 30
years with uniform monthly payment due on the first day of each month. What does Engr. Santos pay each
month?
A. P838.86
B. P849.12
C. P850.12
D. P840.21

655.
A service car whose cash price was P540,000 was bought with a downpayment of P162,000 and
monthly installment of P10,874.29 for 5 years. What was the rate of interest if compounded 5monthly?
A. 20%
B. 24%
C. 21%
D. 23%

657.
In five years, P18,000 will be needed to pay for a building renovation. In order to generate this sum, a
sinking fund consisting of three annual payments is established now. For tax purposes, no further payment will
be made after three years. What payments are necessary if money worth 15% per annum?
A. P3,919.52
B. P3,871.23
C. P3,781.32
D. P3,199.52

659.
If P500.00 is invested at the end of each year for 6 years, at an annual interest rate of 7%, what is the
total peso amount available upon the deposit of the sixth payment?
A. P3,671.71
B. P3,712.87
C. P3,450.12
D. P3,576.64

661.
A man paid a 10% down payment of P200,000 for a house and lot and agreed to pay the balance on
monthly installments for 5 years at an interest rate of 15% compounded monthly.
What was the monthly installment in pesos?
A. P42,821.87
B. P42,980.00
C. P43,102.23
D. P43,189.03

663.
If you obtain a loan of P1M at the rate of 12% compounded annually in order to build a house, how
much must you pay monthly to amortize the loan within a period of 10 years?
A. P13,994.17
B. P14,801.12
C. P13,720.15
D. P14,078.78
665.
For having been loyal, trustworthy and efficient, the company has offered a supervisor a yearly gratuity
pay of P20,000.00 for 10 years with the first payment to be made one year after his retirement. The
supervisor, instead, requested that he be paid a lump sum on the date of his retirement less interact that the
company would have earned if the gratuity is to be paid on the yearly basis. If interest is 15%, what is the
equivalently lump sum that he could get?
A. P100,357.37
B. P100,537.73
C. P100,375.37
D. P100,735.37

667.
A man purchased a car with a cash price of P350,000. He was able to negotiate with the seller to allow
him to pay only a downpayment of 20% and the balance payable in equal 48 end of the month installment at
1.5% interest per month. Once the day he paid the 20th installment, he decided to pay monthly payment. How
much is his monthly payment?
A. P8,929.29
B. P8,225.00
C. P8,552.00
D. P8,008.20

669.
A company purchased for a cash price of P500,000.00 a machine which is estimated to have a salvage
value of P50,000.00 at the end of its 10 years economic life. How much yearly deposit must the company
deposit in a sinking fund that will pay 18% interest, compounded yearly, to accumulate the needed fund to
purchase the new machine at the end of the 10th year economic life of the machine it purchased if a new
machine will cost 75% more by that time?
A. P34,859.78
B. P35,890.12
C. P35,074.58
D. P34,074.85

671.
A machinery supplier is offering a certain machinery on a 10% downpayment and the balance
payable in equal end of the year payments without interest for 2 years. Under this arrangement, the price is
pegged to be P250,000. However, for cash purchase, the machine would only cost P195,000. What is the
equivalent interest rate that is being charged on the 2- year payment plan if interest is compounded
quarterly?
A. 18.47%
B. 19.21%
C. 19.47%
D. 19.74%

673.
If P10,000 is deposited each year for 9 years, how much annuity can a person get annually from the
bank every year for 8 years starting 1 year after the 9th deposit is made. Cost of money is 14%.
A. P34,467.21
B. P34,567.81
C. P34,675.18
D. P34,867.37

675.
A new company developed a program in which the employees will be allowed to purchase shares
of stocks of the company at the end of its fifth year of operation, when the company’s thought to have
gained stability already. The stock has a par value of P100.00 per share.
Believing in the good potential of the company, an employee decided to save in a bank the amount of
P8,000.00 at the end of every year which will earn for him 9% interest, compounded annually.
How much shares of stocks will he be able to purchase at the end of the fifth year of his yearly deposits?
A. 476
B. 478
C. 480
D. 482
677.
A debt of P12,000 with an interest of 20% compounded quarterly is to be amortized by equal semi
annual payments over the next three years, the first due in 6 months. How much is the semi-annual
payments?
A. P2,775.50
B. P2,662.89
C. P2,590.04
D. P2,409.78

679.
If a low cost house and lot worth P87,000 were offered at 10% downpayment and P500 per month for
25 years, what is the effective monthly interest rate on the diminishing balance?
A. 0.492%
B. 4.92%
C. 0.0492%
D. 49.2%

681.
A businessman borrowed P10,000.00 from a bank at 12% interest, and paid P2,000.00 per annum for
the first 4 years. What does he pay at the end of the fifth year in order to pay-off the loan?
A. P6,812.54
B. P6,782.31
C. P6,917.72
D. P6,660.90

683.
Rona wishes to purchase a 29-inch flat-screened colored TV at Bodega Appliance Center an amount of
P20,000.00. She made a downpayment of P5,000.00 and the balance payable in 24 equal monthly
installments. If financing charge is 12% for each year computed on the total balance to be paid by installment
and interest rate 12%, how much would Rona pay every month for the colored TV? What will be the actual
cost of the money?
A. 36.71%
B. 36.21%
C. 35.89%
D. 35.23%

685.
Engr. Bacolongan of Main Engineering decided to purchase a machine which is to be used for their
refrigeration and air-conditioning works at an amount of P1,200,000. The useful life of the machine is
estimated to be 5 years with a salvage value of P80,000 as based on current prices. The average annual rate
of inflation during the next 5 years will be 7%. The machine will be replaced with a duplicate and the firm will
accumulate the necessary capital by making equal end-of-year deposits in a reserve fund. If money is worth
6% per annum, determine the annual deposit.
A. P367,890.12
B. P366,062.33
C. P365,089.34
D. P364,890.43

687.
Engr. Edwin Astorga plans to purchase a new office building costing P1,000,000. He can raise the
building by issuing 10%, 20-year bond that would pay P150,000 interest per year and repay the face amount
at maturity. Instead of buying the new building, he can least it for P140,000 per year, first payment being due
one year from now. The building has an expected life of 20 years. Ignoring effects on income tax, what is the
difference between buying the building and leasing the building?
A. P233,779.27
B. P233,070.12
C. P234,070.34
D. P234,560.12
689.
Froyd Review & Training Center Inc. is expanding its school facilities starting 2001. The program
requires the following estimated expenditures:
P1,000,000 at the end of 2001 P1,200,000 at
the end of 2002 P1,500,000 at the end of
2003

691.
Padilla Pawnshop sells jewelries on either of the following arrangements: Cash Price:
Discount of 10% of the marked price
Installment: Downpayment of 20% of the marked price and the balance payable in equal annual installments for
the next 4 years.
If you are buying a necklace with a marked price of P5,000, how much is the difference between buying in cash
and buying in installment? Assume that money is worth 5%.
A. P40.76
B. P41.90
C. P43.54
D. P45.95

693.
Bicol Hardware Inc is considering two alternative strategies for a new power tool. According to Jun
Ramos who is introducing the power tool, the new product will require an outlay of P30,000 with a low price
strategy. The product will generate cash proceeds of P20,000 per year and will have a life to two years. With a
high price strategy, the product will generate cash proceeds of P36,000 but will have a life of only one year.
The cost of money for the company is 10%. Determine the net present value of the low price strategy.
A. P34,389.12
B. P34,490.10
C. P34,518.89
D. P34,710.74

695.
John Smith plans to purchase a new house costing P1,000,000. He can raise the building by issuing a
10%, 20 year old bond that would pay P150,000 interest per year and repay the face amount at maturity.
Instead of buying the new house, Jan Michael has an option of leasing it for P140,000 per year, the first
payment due one year from now. The building has an expected life of 20 years. If interest charge for leasing is
12%, which of the following is true?
A. Lease is more economical than borrow and buy.
B. Lease has same result with borrow and buy.
C. Borrow and buy is half the value than lease.
D. Borrow and buy is economical by almost a hundred thousand than lease

697.
A housewife bought a brand new washing machine costing P12,000 if paid in cash.
However, she can purchase it on installment basis to be paid within 5 years. If money is worth 8% compounded
annually, what is her yearly amortization if all payments are to be made at the beginning of each year?
A. P2,617.65
B. P2,782.93
C. P2,890.13
D. P2,589.90

699.
A father wishes to provide P40,000 for his son on his son’s 21st birthday. How much should he
deposit every 6 months in a savings account which pays 3% compounded semi- annually, if the first
deposit was made when the son was 3 ½ years old?
A. P829.68
B. P815.80
C. P830.12
D. P846.10
701.
A house costs P400,000 cash. A purchaser will pay P90,000 cash, P60,000 at the end of 2 years and a
sequence of 6 equal annual payments starting with one at the end of 4 years, to discharge all his liabilities as
to the principal and interest at 7% compounded annually. Find the annual payment which must be made for 6
years.
A. P66,204.14
B. P65,701.67
C. P67,901.34
D. P68,900.12

703.
NSN Builders plans to construct an additional building at the end of 10 years for an estimated cost
of P5,000,000.00. To accumulate the amount, it will have equal year end deposits in a fund earning 13%.
However, at the end of the 5th year, it was decided to have a larger building that originally intended to an
estimated cost of P8,000,000.00. What should be the annual deposit for the last 5 years?
A. P734,391.48
B. P742,890.10
C. P738,900.45
D. P740,010.86

705.
Work-in process is classified as:
A. An asset
B. A liability
C. An expenses
D. An owner’s equity

707.
Type of ownership in business where individuals exercise and enjoy the right in their own interest.
A. Equitable
B. Public
C. Private
D. Pure

709.
An association of two or more individuals for the purpose of operating a business as co- owners for
profit
A. Sole proprietorship
B. Company
C. Partnership
D. Corporation

711.
It is defined to be the capacity of a commodity to satisfy human want.
A. Discount
B. Luxury
C. Necessity
D. Utility

713.
This occurs in a situation where a commodity or service is supplied by a number of vendors and
there is nothing to prevent additional vendors entering the market.
A. Perfect competition
B. Oligopoly
C. Monopoly
D. Elastic demand
715.
These are products or services that are required to support human life and activities, that will be
purchased in somewhat the same quantity even though the price varies considerably.
A. Utilities
B. Necessities
C. Luxuries
D. Products, goods and services

717.
Grand total of the assets and operational capability of a corporation.
A. Authorized capital
B. Investment
C. Subscribed capital
D. Money market

719.
Money paid for the use of borrowed capital.
A. Discount
B. Credit
C. Interest
D. Profit

721.
The length of time which the property may be considered at a profit.
A. Physical life
B. Economic life
C. Operating life
D. All of the above

723.
The present worth of all depreciation over the economic life of the item is called
A. Book value
B. Capital recovery
C. Depreciation recovery
D. Sinking fund

725.
Worth of the property as shown in the accounting records of an enterprise.
A. Fair value
B. Market value
C. Salvage value
D. Book value

727.
A market situation where there is only one seller with many buyer.
A. Monopoly
B. Monopsony
C. Oligopoly
D. Oligopsony

729.
A market situation where there is one seller and one buyer.
A. Monopoly
B. Monopsony
C. Bilateral monopoly
D. Bilateral monopsony
731.
The cumulative effect of elapsed time on the money value of an event, based on the earning power
of equivalent invested funds capital should or will learn.
A. Present worth factor
B. Interest rate
C. Time value of money
D. Yield

733.
The flow back of profit plus depreciation from a given project is called:
A. Capital recovery
B. Cash flow
C. Economic return
D. Earning value

735.
Miss Marcial deposited P1,000, P1,500 and P2,000 at the end of the 2nd year, 3rd year and 4th year,
respectively in a savings account which earned 10% per annum. How much is in the account at the end of the
4th year?
A. P4,880.00
B. P4,820.00
C. P4,860.00
D. P4,840.00

737.
An amortization of a debt is in a form of a gradient series of P5,000 on the first years, P4,500 on the
second year, P4,000 on the third year and P3,500 on the fourth year. What is the equivalent present worth of
the debt if interest is 5%?
A. P15,093.28
B. P15,178.34
C. P15,890.12
D. P15,389.82

.739.
An amortization of a debt is in a form of a gradient series of P5,000 on the first year, P4,500 on the
second year, P4,000 on the third year, P3,500 on the fourth year. What is the equivalent uniform periodic
payment if interest is 5%?
A. P4,280.47
B. P4,378.17
C. P4,259.68
D. P4,325.12
743.
Engr. Maragat, believing that life begins at 40, decided to retire and start enjoying life at age 40. He
wishes to have upon his retirement the sum of P5,000,000. On his 21st birthday, he deposited a certain
amount and increased his deposit by 15% each year until he will be 40. If the money is deposited in a super
savings account which earns 15% interest compounded annually, how much was his initial deposit?
A. P17,253.18
B. P17,566.33
C. P17,672.77
D. P17,490.21

745.
The profit derived from a project or business enterprise without consideration of obligations to
financial contributors or claims of other based on profit.
A. Economic return
B. Yield
C. Earning value
D. Expected yield

747.
The interest rate at which the present work of the cash flow on a project is zero of the interest
earned by an investment.
A. Effective rate
B. Nominal rate
C. Rate of return
D. Yield

749.
The true value of interest rate computed by equations for compound interest for a 1 year period is
known as:
A. Expected return
B. Interest
C. Nominal interest
D. Effective interest

751.
The recorded current value of an asset is known as:
A. Scrap value
B. Salvage value
C. Book value
D. Present worth

753.
What is sometimes called second-hand value?
A. Scrap value
B. Salvage value
C. Book value
D. Going value

755.
A company issued 50 bonds of P1,000.00 face value each, redeemable at par at the end of 15 years. To
accumulate the funds required for redemption the firm established a sinking fund consisting of annual
deposits, the interest rate of the fund being 4%. What was the principal in the fund at the end of the 12th
year?
A. P37,002.54
B. P37,520.34
C. P38,010.23
D. P38,782.34

757.
A P1,000,000 issue of 3%, 15-year bond was sold at 95%. What is the rate of interest of this
investment?
A. 3.0%
B. 3.4%
C. 3.7%
D. 4.0%

759.
A P1,000 bond which will mature in 10 years and with a bond rate of 8% payable annually is to be
redeemed at par at the end of this period. It is sold at P1,030. Determine the yield at this price.
A. 7.56%
B. 7.65%
C. 7.75%
D. 7.86%

761.
A P1,000, 6% bond pays dividend semiannually and will be redeemed at 110% on June 21, 2004. It is
bought on June 21, 2001 to yield 4% interest. Find the price of the bond.
A. P1,122.70
B. P1,144.81
C. P1,133.78
D. P1,155.06

763.
A type of annuity where the payments are made at the end of each payment period starting from
the first period.
A. Ordinary annuity
B. Annuity due
C. Deferred annuity
D. Perpetuity
765.
A type of annuity where the payments are made at the start of each period, beginning from the first
period.
A. Ordinary annuity
B. Annuity due
C. Deferred annuity
D. Perpetuity

767.
A is a periodic payment and I is the interest rate, then present worth of a perpetuity =
A. Ai
B. Ain
C. An/i
D. A/

769.
As applied to a capitalized asset, the distribution of the initial cost by a periodic changes to operation as
in depreciation or the reduction of a debt by either periodic or irregular prearranged program is called
A. Annuity
B. Capital recovery
C. Annuity factor
D. Amortization

771.
A method of computing depreciation in which the annual charge is a fixed percentage of the
depreciated book value at the beginning of the year which the depreciation applies.
A. Straight line method
B. Sinking fund method
C. SYD method
D. Declining balance method

773.
A machine costs P8,000 and an estimated life of 10 years with a salvage value of P500.
What is its book value after 8 years using straight line method?
A. P2,000.00
B. P2,100.00
C. P2,200.00
D. P2,300.00

775.
ABC Corporation makes it a policy that for any new equipment purchased, the annual depreciation
cost should not exceed 20% of the first cost at any time with no salvage value. Determine the length of
service life necessary if the depreciation used is the SYD method.
A. 7 years
B. 8 years
C. 9 years
D. 10 years

777.
An asset is purchased for P500,000.00. The salvage value in 25 years is P100,000.00.
What is the total depreciation in the first three years using straight-line method?
A. P45,000.00
B. P46,000.00
C. P47,000.00
D. P48,000.00
779.
An asset is purchased for P9,000.00. Its estimated life is 10 years after which it will be sold for
P1,000.00. Find the book value during the first year if SYD depreciation is used.
A. P7,545.45
B. P7,320.11
C. P7,490.00
D. P7,690.12

781.
An asset is purchased for P20,000.00. Its estimated life is 10 years after which it will be sold for
P12,000.00. Find the depreciation for the first year using SYD method.
A. P1,545.45
B. P1,454.54
C. P1,344.21
D. P1,245.45

783.
A machine has an initial cost of P50,000.00 and a salvage value of P10,000.00 after 10 years. What is
the straight line method depreciation rate as a percentage of the initial cost?
A. 10%
B. 8%
C. 7%
D. 9%

785.
An asset is purchased for P120,000.00. Its estimated life is 10 years, after which it will be sold for
P12,000.00. Find the depreciation for the second year using the sum-of-years’ digit method.
A. P17,578.13
B. P17,412.43
C. P17,344.67
D. P17,672.73

787.
An asset is purchased for P9,000.00. Its estimated economic life is 10 years after which it will be sold for
P1,000.00. Find the depreciation in the first three years using straight line method.
A. P2,400.00
B. P2,412.34
C. P2,250.00
D. P2,450.00

789.
The initial cost of a paint sand mill, including its installation, is P800,000. The BIR approved life of
this machine is 10 years for depreciation. The estimated salvage value of the mill is P50,000 and the cost of
dismantling is estimated to be P15,000. Using straight-line depreciation, what is the annual depreciation
charge?
A. P75,500.00
B. P76,000.00
C. P76,500.00
D. P77,000.00

791.
A unit of welding machine cost P45,000 with an estimated life of 5 years. Its salvage value is
P2,500. Find its depreciation rate by straight-line method.
A. 18.89%
B. 19.21%
C. 19.58%
D. 19.89%
793.
An equipment costs P10,000 with a salvage value of P500 at the end of 10 years.
Calculate the annual depreciation cost by sinking-fund method at 4% interest.
A. P791.26
B. P792.61
C. P726.17
D. P771.26

795.
A consortium of international telecommunications companies contracted for the purchase and
installation of fiber optic cable linking Manila City and Cebu City at a total cost of P960 million. This amount
includes freight and installation charges estimated at 10% of the above total contract price. If the cable shall
be depreciated over a period of 15 years with zero salvage value and money is worth 6% per annum, what is
the annual depreciation charge?
A. P41,044,903.40
B. P41,211,158.40
C. P41,254,000.40
D. P41,244,253.40

797.
A radio service panel truck initially cost P560,000. Its resale value at the end of the 5th year of the
useful life is estimated at P150,000. By means of declining balance method, determine the depreciation
charge for the second year.
A. P99,658.41
B. P99,128.45
C. P99,290.00
D. P99,378.45

Shell Philippines, a multinational company, has a total gross income for a particular year of
P50,000,000. The taxable income after taking all deductions except for depletion is P18,500,000. What is the
allowable depletion allowance for that particular year? Take percentage of gross income for oil as 22%.
799.
A. P9,358.41
B. P9,228.45
C. P9,250.00
D. P9,308.45

801.
The first cost of a certain equipment is P324,000 and a salvage value of P50,000 at the end of its life
of 4 years. If money is worth 6% compounded annually, find the capitalized cost.
A. P540,090.34
B. P541,033.66
C. P540,589.12
D. P541,320.99

803.
A corporation uses a type of motor which costs P5,000 with 2 life years and final salvage value of P800.
How much could the corporation afford to pay for another type of motor of the same purpose whose life is 3
years a with a final salvage value of P1,000. Money is worth 4%.
A. P7,892.13
B. P7,157.40
C. P7,489.21
D. P7,300.12