Sample Problems in engineering economics

Engineering Problems

1. Seatwork #1 January 29, 2024 Engineering Economy

2. ( 10 points ) A certain property is being sold and the owner received two bids. The 1 st bidder offered to pay P500,000 each year for 5 years, each payment is to be made at the beginning of each year. The 2 nd bidder offered to pay P400,000 first year, Php 510,000 the second year, and P530,000 each year for the next 3 years, all payments will be made at the beginning of each year. If money is worth 20% compounded quarterly, which bid should the owner of the property accept? ( 10 points ) A debt of P50,000, whose interest rate is 15% compounded semiannually, is to be discharged by a series of 10 semiannual payment, the first payment to be made 6 months after the consummation of the loan. The first 6 payments will be P5,000 each, while the remaining 4 payments will be equal and of such amount that the final payment will liquidate the debt. What is the amount of the last 4 payments?