If the public debt of a country in 2009 was $12,752,000,000,000 and the budget for 2010 was in deficit by $201,645,000,000, what was the public debt in 2007?

The answer is $12,356,589,147,287

To calculate this, we will use the equation for exponential function:

y = x (r + 1) ⁿ

y - the future value

x - the current value

r - the rate of change

n - the number of years

step 1. calculate the rate of change.

It is given:

y = $12,752,000,000,000 + $201,645,000,000 = 12,953,645,000,000

x = $12,752,000,000,000

r = ?

n = 2010 - 2009

Therefore:

y = x (r + 1) ⁿ

12,953,645,000,000 = 12,752,000,000,000 * (r + 1) ¹

12,953,645,000,000 : 12,752,000,000,000 = (r + 1) ¹

1.016 = r + 1

r = 1.016 - 1

r = 0.016

step 2. Calculate dept for 2007.

It si given:

y = $12,752,000,000,000 (since it is in 2009, this is future value)

x = ? (initial value in 2007

r = 0.016

n = 2009 - 2007 = 2

y = x (r + 1) ⁿ

12,752,000,000,000 = x (0.016 + 1) ²

12,752,000,000,000 = x (1.016) ²

12,752,000,000,000 = x * 1.032

x = 12,752,000,000,000 : 1.032

x = 12,356,589,147,287