Final answer:
To calculate the value of accumulated debt in 10 years for the newly independent government of Tanzania, we need to consider government spending, net taxes, and interest on government bonds.
Step-by-step explanation:
The subject of this question is Business and the grade level is College.
To calculate the value of the accumulated debt in 10 years, we need to consider the government expenditure, net taxes, and the interest on government bonds. In this scenario, the government plans to spend 10 million shillings on schools, roads, and healthcare, while the net taxes for the year are estimated to be eight million shillings. The difference between government spending and net taxes will be financed by selling 10-year government bonds at a 12% interest rate per year.
In the end, we can compute the accumulated debt by considering the annual interest added to the outstanding bonds each year and the additional taxes placed to cover the increase in government expenditure. If the school, road, and healthcare budget remain unchanged, we can calculate the value of the accumulated debt in 10 years by adjusting for the interest and additional taxes.