Question 1207279: 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 9 years. Assume an annual interest rate of 5%. (Round to the nearest billion dollars, e.g. type 605 for $605 billion dollars).
Answer by math_tutor2020(3817)   (Show Source):
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Answer: 703
Work Shown
Loan payment formula
P = (L*i)/(1 - (1+i)^(-n))
where,
P = annual payment in billions of dollars
L = loan amount in billions of dollars
i = interest rate per year
n = number of years
In this case
L = 5000 (since $5 trillion = $5*1000 = $5000 billion)
i = 0.05
n = 9
Let's determine the annual payment
P = (L*i)/(1 - (1+i)^(-n))
P = (5000*0.05)/(1 - (1+0.05)^(-9))
P = 703.450399878939 approximately
P = 703 after rounding to the nearest whole number
This represents $703 billion aka $703,000,000,000
There are 9 zeros after the 703.
In scientific notation it would be 7.03 * 10^11
The exponent 11 means "move the decimal point 11 spots to the right" to go from 7.03 to that massive number shown above.
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