Answer:
Interest Expenses for six month = $44309.045
Explanation:
Given:
Sold amount = $805,619
Yield = 11% = 11/100 = 0.11
Interest Expenses = ?
Computation of Interest Expenses :
Time period (January 1 to July 1) = 6 month
Yield = 0.11 / 2 = 0.055 semi-annually
Interest Expenses = Sold amount × Yield
Interest Expenses for six month = $805,619 × 0.055
Interest Expenses for six month = $44309.045
Answer:
The U.S. federal debt as a fraction of GDP in year 2050 will be 77%
Explanation:
According to the given data we have the following:
Debt in the end of 2018 = 104% of GDP
Nominal GDP growth = 3%
Interest on debt = 2%
In order to calculate What will be the U.S. federal debt as a fraction of GDP in year 2050 first we have to calculate the debt in 2050 using the following formula:
Debt in 2050 = Current Debt*(1+r%)n
Debt in 2050 = 104*1.0232 = 196
Next, we would have to calculate the GDP in 2050 using the following formula:
GDP in 2050 = Current GDP*(1+r%)n
GDP in 2050 = 100*1.0332 = 257.5
Therefore, Debt as percentage of GDP in 2050 = 196/ 257 = 77%