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South World has a total debt of $10 million and an annual GDP of $5 million. It currently pays 4% interest on its debt every year. What percentage of annual GDP does interest on the debt represent
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8 votes
8 votes
South World has a total debt of $10 million and an annual GDP of $5 million. It currently pays 4% interest on its debt every year. What percentage of annual GDP does interest on the debt represent

User YoK
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1 Answer

15 votes
15 votes

Answer: 8.0%

Step-by-step explanation:

The debt interest it pays is:

= 4% * 10,000,000

= $400,000

Its percentage of annual GDP is:

= 400,000 / 5,000,000 * 100%

= 8.0%

User Joseph Fraley
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2.2k points
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