Geometric gradient series, Macroeconomics

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Determine the present worth of a geometric gradient series with a cash flow of $50,000 in year 1 and increases of 6% each year through year 8. The interest rate is 10% per year.

If the price elasticity of demand for bus rides is 0.5, the income elasticity of demand for bus rides is -0.1, and the cross elasticity of demand for bus rides with respects to gasoline (personal computation) is 0.2,

Is the demand from bus rides elastic or inelastic with respects to the price of a bus ride and Why? And would an increase in bus fare increase the bus company's total revenue?


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