10.

What do you think is an agreed payment made to an owner of an industrial property right for the grant
of an exclusive sell for profit of the item concerned?
a) Salary
b) Commission
c) Royalty
d) Profit share
C
11. What do you think is a form of indirect tax which is incorporated into the selling price of a product
and which is borne by the customer?
a) EVAT
b) Capital gain tax
c) Sales tax
d) Tariff
C
12. What do you think is the meaning of the acronym EVAT?
a) Extended value added tax
b) Expanded value added tax
c) External value added tax
d) Export value added tax
B
13. How do you call a market that deals in long-term company securities (stocks and shares) and
government securities (bonds)?
a) Stock exchange
b) Share market
c) Super market
d) Test market
A
14. What do you think is the negotiation of wage rates, conditions of employment, etc. by representatives
of the labor force and management?
a) Union trade
b) Union rally
c) Collective bargaining d) Cooperative
C
15. How do you call a form of business firm that is owned and run by a group of individuals for their
mutual benefit?
a) Union
b) Cooperative
c) Partnership
d) Joint venture
D
16. If P5000 lent out at 18% annual simple interest earned P450 interest, how long had it been lent?
a) 1 year
b) 6 months
c) 2 months
d) 6 days
B

n
Solution:

I
450

0.5 year 6 months

Pi 5000 0.18

17. What is the simple interest rate if an investment of P37,500.00 accumulates to P45,937.5 in 18
months?
a) 0.15
b) 0.2
c) 0.21
d) 0.3
A
Solution:

F P 1 i n

100 % F P 100 % 45,937.5 37,500.00 100 % 15 %

i P
1.5 37,500.00
n
nP

18. If the loan was for 15 months at 16.8% interest a year and the repayment on a loan was P12,100.00,
how much was the principal?
a) P8,500.00
b) P9,500.00
c) P10,000.00
d) P10,500.00
C

P
Solution:

1 i

12,100.00

1.168 1.25

P9,965.10 P10,000.00

19. Determine the accumulated value of P2,000.00 in 5 years it is invested at 11% compounded quarterly.
a) P3,440.00
b) P3,404.00
c) P3,044.00
d) P4,304.00
A

Solution:

i
F P 1 n
m

mn

0.11

2,000.00 1

4 5

P3,440.00

20. The sum of P15,000.00, deposited in an account earning 4% per annum compounded quarterly, will
become P18,302.85. Determine the effective rate of interest per year.
a) 3.06 %
b) 4.06 %
c) 5.06 %
d) 6.06 %
B

Solution:

i
ie 1 n
m

0.04
1 100 % 1

1 100 % 4.06 %

21. What is the present value of P5,000.00 due in 8 years if money is worth 12% compounded semiannually?
a) P1,896.23
b) P1,869.23
c) P1,698.23
d) P1,968.23
D

P
Solution:

F
i
1 n
m

mn

5,000.00

0.12
1

2 8

P1,968.23

22. If a machine is purchased on installment and the buyer makes an P80,000.00 down payment and owes
a balance of P150,000 in 2 years. Determine the machine cash value if money is worth 14%
compounded quarterly.
a) P199,312.00
b) P183,912.00
c) P193,912.00
d) P139,912.00
C
Solution: Cash Value = Down payment + Present value of the balance

Cash Value P80,000.00

F
i
1 n
m

mn

P80,000.00

150,000.00
0.14
1

4 2

P193,912.00

23. Determine the compound amount if P5,000.00 is invested for 3 years and 9 months at 12%
compounded semi-annually.
a) P7,740.41
b) P7,407.41
c) P7,470.41
d) P7,447.10
A

Solution:

i
F P 1 n
m

mn

0.12

5,000.00 1

2 3.75

P7,740.41

24. What is the present value of P1,000 due in 3 years and 4 months at 11% compounded Quarterly?
a) P665.94
b) P669.54
c) P696.54
d) P656.94
C

P
Solution:

mn

i
1 n
m

1,000.00

0.11
1

4 3.333

P696.54

25. Find the number of years when P2,500.00 is compounded to P5,800.00 if invested at 12%
compounded quarterly.
a) P6.12 years
b) 7.12 years
c) 8.12 years
d) 5.12 years
B

Solution:

i
1 n
m

mn

F
P

i
F
mn ln 1 n ln
m
P

5,800.00

2,500.00

ln

ln

i
ln 1 n
m

0.12
ln 1

7.12 years

26. What is the effective rate equivalent of 12% compounded quarterly?

a) 12.55%
b) 11.55 %
c) 12.98 %
A

Solution:

i
ie 1 n
m

0.12
1 100 % 1

d) 13 %

1 100 % 12.55 %

27. What rate compounded-quarterly is equivalent to 14% compounded semi-annually?

a) 10.76 %
b) 11.76 %
c) 12.76 %
d) 13.76 %
D

Solution:

i
ie 1 n
4

in

0.14
1 100 % 1

1.1449

1 100 %

i n 4 1.1449 4 1 13.76 %

28. Celestino owes P500, due in 3 years and P800 due in 7 years. He is allowed to settle these obligations
by a single payment on the 6th year. Find how much he has to pay on the 6 th year if money is worth
14% compounded semi-annually.
a) P1,449.12
b) P 1,559.12
c) P1,339.12
d) P1,669.12
A

F6 th

0.14

500 1

Solution:

2 3

800

0.14
1

2 1

750.37 698.75 P1,449.12

29. Determine the present value of P5,000.00 due in 5 years at 7 % compounded continuously.
a) P3,500.44
b) P 3,550.44
c) P3,450.44
P3,523.44
D

P
Solution:

F
e

in n

5,000.00

e 0.07 5

P3,523.44

d)