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If a government policy increases the tax rate by 15% and the initial tax revenue

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Question: If a government policy increases the tax rate by 15% and the initial tax revenue was $200 million, what will be the new tax revenue?

Options:

  1. $230 million
  2. $250 million
  3. $200 million
  4. $220 million

Correct Answer: $230 million

Solution: 

New tax revenue = Initial revenue + (15% of Initial revenue) = 200 + (0.15 * 200) = 230 million.

If a government policy increases the tax rate by 15% and the initial tax revenue

Practice Questions

Q1
If a government policy increases the tax rate by 15% and the initial tax revenue was $200 million, what will be the new tax revenue?
  1. $230 million
  2. $250 million
  3. $200 million
  4. $220 million

Questions & Step-by-Step Solutions

If a government policy increases the tax rate by 15% and the initial tax revenue was $200 million, what will be the new tax revenue?
  • Step 1: Identify the initial tax revenue, which is $200 million.
  • Step 2: Calculate 15% of the initial tax revenue. To do this, multiply the initial revenue by 0.15: 200 * 0.15.
  • Step 3: Perform the multiplication: 200 * 0.15 = 30 million.
  • Step 4: Add the result from Step 3 to the initial tax revenue: 200 + 30.
  • Step 5: Perform the addition: 200 + 30 = 230 million.
  • Step 6: The new tax revenue is $230 million.
  • Percentage Increase – Understanding how to calculate a percentage increase on a given amount.
  • Tax Revenue Calculation – Applying the concept of tax revenue and how changes in tax rates affect total revenue.
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