Digital PSAT Math Practice Question 295: Answer and Explanation

Question: 295

For fiscal year 2017, the State of New York has the following spending allocations for its $96 billion budget:

If in the two years after this budget, the budget percentage allocations remain constant and New York state government spending increases at a constant rate of 6% a year, how much money will be spent in the budget two years after this budget on the Executive part (to the nearest tenth of a billion dollars)?

• A. $17.0 billion
• B. $18.0 billion
• C. $18.3 billion
• D. $18.9 billion

Correct Answer: C

Explanation:

(C) You are told that the budget increases by 6% a year. Thus, in one year, the budget will be

$96 billion + 0.06($96 billion) = 1.06($96 billion) = $101.76 billion

Similarly, in the second year, the budget will increase by 6% again to

1.06($101.76 billion) = $107.87 billion

Now, you want to know how much of this money will be allocated to the Executive portion. You are told that the budget percentage allocations remain the same, so by the chart, 17% of the budget will still go to the Executive part. Thus, the Executive part is allocated 0.17($107.87 billion) = $18.3 billion, which is choice (C).