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Deceptive Advertising? Businesses sometimes advertise that you should Come try our product. If you do , we'll give you $ 1 0 0 just for
Deceptive Advertising?
Businesses sometimes advertise that you should Come try our product. If you do we'll give you $ just for coming by If you read the fine print, what you find out is that they will give you a savings certificate that will pay you $ in years or so If the going interest rate on such certificates is percent per year, how much are they really giving you today?
What you're actually getting is the present value of $ to be paid in years. If the discount rate is percent per year, then the discount factor is:
This tells you that a dollar in years is worth a little more than nine cents today, assuming a percent discount rate. Given this, the promotion is actually paying you about times $ $ Maybe this is enough to draw customers, but it's not $
Ethical Considerations: Take a look back at Example Is it deceptive advertising? Is it unethical to advertise a future value like this without a disclaimer?
Have you ever seen an advertisement or experienced a situation like this, where a monetary offer has been made, yet the "fine print disclaimer discloses that the actual monetary amount involved may be different from its "initial appearance?"
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