This is a standard approach to calculating firm value and it is the infinite sum of all future profits (P), and it is calculated asP/i, where i is the interest rate.(Note: 1/i is an an infinite sum of (1/(1+i)^t) for t from 1 to infinity).

Use this approach to calculate NPV of GDP (instead of profits), assuming GDP growth of 0, so that GDP in every future period is $21 trillion, and interest rate of 1.6%.Hint: don't use the % version of i, but rather i = 0.016.

Using the latest data for the US government debt, $28 trillion, calculate the ratio of debt to NPV(GDP).Express your answer in percent.