Gce Model Questions Vol1 2022 Government Question 21

A local council's current annual revenue is £20 million, of which property tax provides 40 % (£8 million). The other sources are a government grant of £5 million, fees of £3 million and investment income of £4 million. The council aims to raise total revenue by 10 % next year, but the grant is expected to increase by only 2 % and fees by 5 %; investment income will remain unchanged. All the additional revenue required must come from a higher property‑tax rate. (a) What percentage increase in the property‑tax rate is required to meet the target revenue? (b) If the council currently allocates 25 % of its total revenue to waste‑management, how much additional money must be set aside for waste‑management under the new revenue target if the council wishes to allocate 30 % of the new total revenue to that purpose?