The $125 billion reported in the press was rounded, but the original amount was precisely $600
million. Assuming the time periods are exactly seven years at a periodic interest rate of 1% per week
and exactly 21 years at 8.54% APY, how much was the bill to the nearest dollar?
For simplicity and convenience, please use $125.5 billion as the amount owed (bill) for questions #2 -
#6 below:
2. What is the APY over the entire 28 years as the $600 million grows to the amount owed?
3. Suppose Ticino could pay $5 billion per year. How long would it take to pay off the amount owed,
assuming interest continued to be charged at 8.54% APY? Assume annual payments begin one year
from the date the amount is owed.
4. Suppose Ticino could pay $12 billion per year. How long would it take to pay off the amount owed,
assuming interest continued to be charged at 8.54% APY? Assume annual payments begin one year
from the date the amount is owed.
5. Suppose Ticino decides to pay the amount owed by making 30 annual payments at 8.54% APY. What
is the annual payment amount if the first payment begins immediately from the date the amount is
owed?
6. Suppose Ticino decides to pay the amount owed by making 30 annual payments at 8.54% APY. What
is the amount of the annual payment if the first payment begins three months after the date the
amount is owed?