The U.S. national debt was about $5056 billion on January 1, 2000, and increased to $9254 billion on January 1, 2007.

Question

Assume that the U.S. national debt grows exponentially. Find the 7 year growth factor and the annual growth factor for national debt.

Answer 1

The equation is:

 

9254 = (1+x)^7 x 5056

 

9254 / 5956 = (1+x)^7

 

1.830300633 = (1+x)^7

 

(1.830300633)^(1/7) = 1+x

 

1.090192536 = 1+x

 

so x = 0.090192536 or 9.01925%

 

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