How would you solve this macro economics problem?

I can’t read it could you type it out?

Uh, looks like Photobucket is down.

It works now.

@Dutchess_III sorry I am using my cell phone. I won’t be able to help out.

40

20% of 180 trillion is 36 trillion.
and 36 trillion is 40% of 90 trillion.

it is not a macro economics problem.
it is a simple mathematics problem. the economics stuff is just window dressing to add real world context.

40% @ragingloli said it all. Even the final comment is right on.

I’m just curious if we could figure out what the annual budget for the country might be and then figure what percentage of the budget goes to debt service. That might be really scary.

@Adirondackwannabe The percentage of the U. S. budget used for debt coverage was 6.3% in FY2012, or $230 Billion (down from $232 Billion in 2011).

Ouch, I use to look at it and see 140 billion, and think that was ridiculous. I’d be curious about our fictional country in the link.

On a macroeconomics level, however, it’s not so cut-and-dried, since it is unlikely in the extreme that all of the debt will have been converted to the new rate. It’s only the marginal debt that is paid at the high rate (the newest debt), but since we don’t know what the “very low interest rates” were, or how much debt was accrued under those rates or anything about the payment terms… @ragingloli‘s answer is the answer to the apparent homework question‽

No, it’s me, @CWOTUS. I’m not in school. This was just an example of the kinds of questions a friend of mine on FB gets in her macro class. She wasn’t asking anyone to solve it for her, but she was asking for help understanding the harder problems (she did say, “And this isn’t even a hard one.”) I was trying to encourage her to come here for help. So I’m sending some of these answers back to show her the kinds of stuff we talk about.

The hardest part about these kind of questions, by design, is cutting out all of the bullshit that is irrelevant to the equations.
in this case, the entire first paragraph except the 20%.

So, out of curtiosity, what’s the formula?

(100/90)*(180*0.2)

Wait…where did you get the 100 in 100/90?

just so you get a 40 in the end instead of 0.4.

(it represents 100%)

Thanks.