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1 April, 13:02

If the public debt of a country in 2009 was $12,752,000,000,000 and the budget for 2010 was in deficit by $201,645,000,000, what was the public debt in 2007?

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  1. 1 April, 13:16
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    The answer is $12,356,589,147,287

    To calculate this, we will use the equation for exponential function:

    y = x (r + 1) ⁿ

    y - the future value

    x - the current value

    r - the rate of change

    n - the number of years

    step 1. calculate the rate of change.

    It is given:

    y = $12,752,000,000,000 + $201,645,000,000 = 12,953,645,000,000

    x = $12,752,000,000,000

    r = ?

    n = 2010 - 2009

    Therefore:

    y = x (r + 1) ⁿ

    12,953,645,000,000 = 12,752,000,000,000 * (r + 1) ¹

    12,953,645,000,000 : 12,752,000,000,000 = (r + 1) ¹

    1.016 = r + 1

    r = 1.016 - 1

    r = 0.016

    step 2. Calculate dept for 2007.

    It si given:

    y = $12,752,000,000,000 (since it is in 2009, this is future value)

    x = ? (initial value in 2007

    r = 0.016

    n = 2009 - 2007 = 2

    y = x (r + 1) ⁿ

    12,752,000,000,000 = x (0.016 + 1) ²

    12,752,000,000,000 = x (1.016) ²

    12,752,000,000,000 = x * 1.032

    x = 12,752,000,000,000 : 1.032

    x = 12,356,589,147,287
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