Gross federal debt was greater than $16 trillion
at the end of 2012. Historically, interest rates on
Treasury bonds have been considerably higher
than they were in 2012. Assume, for simplicity,
that the government pays the same interest rate
on all outstanding debt. What is the approximate
annual interest payment if the debt is $16 trillion
and the interest rate is:
a. 0.5%?
b. 3%?
c. 5%?