Question

A.) Suppose that South Pangean debt is $100 million and the interest rate it pays on that debt is 4 percent. That means its interest payments must be $ million.

b.) If South Pangean expenditures are $30 million without interest payments, that means its expenditures with interest payments are $ million.

Answer 1

The interest payments on South Pangean debt are $4 million, and the total expenditures with interest payments are $34 million.

Step-by-step explanation:

The student is dealing with a financial mathematics problem related to debt and interest payments.

Interest Payment Calculation

If South Pangean debt is $100 million at an interest rate of 4 percent, their yearly interest payment is calculated as:

(100,000,000 x 0.04) = $4 million.

So, the total interest payment must be $4 million.

Total Expenditures Calculation

With expenditures of $30 million without interest payments:

(30,000,000 + 4,000,000) = $34 million.

Therefore, the expenditures with interest payments would amount to $34 million.

Answer 2

a

$4 million

b.

expenditures with interest payments

Step-by-step explanation:

a.

The interest payment is the value of debt taken multiplied by the interest rate on the debt.

In other words, the interest payment is computed using the below formula:

annual interest payment=value of debt*interest rate

value of debt=$100 million

interest rate=4%

annual interest payment=$100 million*4%

annual interest payment=$4 million

b.

The expenditures with interest payments are is the expenditures without interest payments plus interest payments determined as $4million above

expenditures with interest payments=expenditures without interest payments+interest payments

expenditures without interest payments=$30 million

interest payments=$4 million

expenditures with interest payments=$30million+$4million

expenditures with interest payments=$34million