Question: The U . S . A . purchases $ 1 billion of 3 0 - year bonds from a foreign nation. The bonds yield 4

The U.S.A. purchases $1 billion of 30-year bonds from a foreign nation. The bonds yield 4.5% interest per year. However, there are no annual interest payments made on the bond (i.e., this is a "zero-coupon" bond). Instead, all interest is at the end of the bond life, along with repayment of the face value.
A U.S. senator objected to this purchase, saying the correct interest rate for bonds like should be 7.25%. Assuming the senator's rate is correct, how much will the foreign country have avoided paying in interest? Express your answer in billions of dollars to 3 decimal places (4 significant figures).

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