Question

A government collects $700 billion annually in tax revenue. Each year it allocates $130 billion to interest payments that it must pay on its accumulated debt. What percentage of annual tax revenue is allocated to make these interest payments

Answer 1

18.57%

Step-by-step explanation:

Given that

Government collection annually in tax revenue = $700 billion

Interest payment each year = $130 billion

By considering the above information, the percentage would be

= (Interest payment each year) ÷ (Government collection annually in tax revenue) × 100

= ($130 billion ÷ $700 billion) × 100

= 18.57%

We simply divide the each year interest payment by the government collection on annually basis so that the percentage could come