If a country's debt-to-gdp ratio is currently 15% and its debt is expected to grow from 2 trillion dollars to 3 trillion dollars in the next 5 years what will the country's GDP have to be in five years to maintain the current debt-to-gdp ratio

Question

Mathematics

Miriam

10 November, 07:43

If a country's debt-to-gdp ratio is currently 15% and its debt is expected to grow from 2 trillion dollars to 3 trillion dollars in the next 5 years what will the country's GDP have to be in five years to maintain the current debt-to-gdp ratio

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Sonny · Answer 1

If the current debt is 2 trillion dollars, then the GDP must be 2/1.15=$1.7391 X 10^12. If the ratio of 15% must be maintained in 5 years time, then the GDP must grow to: 3/2 X 1.7391 X 10^12

=$2.60865 X 10^12. Because: 3 X 10^12/2.60865 X 10^12=1.15=15%