SOLUTION: Consider the publicly held debt of​ $5.0 trillion in 2006. Use the loan payment formula to determine the annual payments needed to pay this debt off in 12 years. Assume an an

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Question 1096517: Consider the publicly held debt of​ $5.0 trillion in 2006. Use the loan payment formula to determine the annual payments needed to pay this debt off in 12 years. Assume an annual interest rate of 4​%.
Answer by jorel1380(3719) About Me  (Show Source):
You can put this solution on YOUR website!
Using the loan amortization formula of P = L[c(1 + c)^n]/[(1 + c^)n - 1], where P is the payment, L is the amount of the loan, c is the yearly interest rate, and n is the amount of time, in years, we have:
P=5(.04(1+.04)^12))/(1+.04)^12 -1
P=5(0.0640412887)/0.6010322
P=0.532760879888858131 trillion, or $532,760,879,888.86 per year to retire the debt.
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