Ask Question
4 July, 02:29

As of August 2018, the US national debt was $20 trillion. Suppose that we decide as a nation to (i) stop adding to the debt, effective immediately, and (ii) be debt free in 25 years. How much would we need to pay each year, assuming an interest rate of 6%, compounded annually?

A) $2.433 trillion

B) $1.564 trillion

C) $0.837 trillion

D) $1.252 trillion

+2
Answers (1)
  1. 4 July, 02:51
    0
    The answer is B) $1.564 trillion

    Explanation:

    PV of annuity = P[ (1 - (1.06) ^-25) / 0.06) ]

    20 trillion = P[ (1 - (1.06) ^-25) / 0.06) ]

    20 trillion = 12.78P

    P = $1.564 trillion
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “As of August 2018, the US national debt was $20 trillion. Suppose that we decide as a nation to (i) stop adding to the debt, effective ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers