A homebuilder's advertising has the caption, "Inflation to Continue for Many Years." The advertisement continues with the explanation that if one buys a home now for $97,000, and inflation continues at a 7% annual rate, the home will be worth $268,000 in 15 years. According to the advertisement, by purchasing a new home now, the buyer will realize a profit of $171,000 in 15 years. Do you find this logic persuasive? Explain.

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter8: Evolutionary Solver: An Alternative Optimization Procedure
Section8.6: Fitting An S-shaped Curve
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A homebuilder's advertising has the caption, "Inflation to Continue for Many Years." The advertisement continues
with the explanation that if one buys a home now for $97,000, and inflation continues at a 7% annual rate, the
home will be worth $268,000 in 15 years. According to the advertisement, by purchasing a new home now, the
buyer will realize a profit of $171,000 in 15 years. Do you find this logic persuasive? Explain.
Transcribed Image Text:A homebuilder's advertising has the caption, "Inflation to Continue for Many Years." The advertisement continues with the explanation that if one buys a home now for $97,000, and inflation continues at a 7% annual rate, the home will be worth $268,000 in 15 years. According to the advertisement, by purchasing a new home now, the buyer will realize a profit of $171,000 in 15 years. Do you find this logic persuasive? Explain.
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