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Business, 12.12.2019 03:31 atsuedem974

Assume that you are employed by the government of tanzania in 1964, a new nation recently independent from britain. the tanzanian parliament has decided that it will spend 10 million shillings on schools, roads, and healthcare for the year. you estimate that the net taxes for the year are eight million shillings. the difference will be financed by selling 10-year government bonds at 12% interest per year. the interest on outstanding bonds must be added to government expenditure each year. assume that additional taxes are added to finance this increase in government expenditure so the gap between government spending is always two million. if the school, road, and healthcare budget is unchanged, compute the value of the accumulated debt in 10 years.

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