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Economics

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1.If demand is inelastic, does a drop in price raise or lower total expenditure by buyers? Explain why, using the meaning of “inelastic”.

2.Mr X borrowed from Pagbig Fund House and Lot worth 1.6 M. at 7.5% effecive interest. He will amortized the loan in 20 years equal monthly payments. What is this monhtly payment? What will be the peresent worth of his first 5 years of monthly payments? The Future worth of all his 5 years monthly payments. If he decide to pay the entire loan after the 5 years monthly installment? How much will he pay?