Question: The U . S . A . purchases $ 1 billion of 3 0 - year bonds from a foreign nation. The bonds yield 4
The USA purchases $ billion of year bonds from a foreign nation. The bonds yield interest per year. However, there are no annual interest payments made on the bond ie this is a "zerocoupon" bond Instead, all interest is at the end of the bond life, along with repayment of the face value.
A US senator objected to this purchase, saying the correct interest rate for bonds like should be Assuming the senators rate is correct, how much will the foreign country have avoided paying in interest? Express your answer in billions of dollars to decimal places significant figures
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