The government begins year 1 with $25 billion of debt. Based on the information in the above table, what is the amount of debt following year 3?
A) $260 billion
B) $20 billion
C) $5 billion
D) $15 billion

Question

Quizplus · Accepted Answer

The debt decreases by $10 billion each year, so after 3 years, the debt will be $25 billion - $30 billion = -$5 billion, but since debt can't be negative, it means the government has a surplus of $5 billion, resulting in $15 billion of debt remaining.

The Government Begins Year 1 with $25 Billion of Debt