Fix It Penny Has Been Struggling with Her Weight for Some Time

question 5

Essay

Fix It
Penny has been struggling with her weight for some time now and decides it is time for a lifestyle change. In addition to exercising daily and eating right, Penny takes Fat-Away, an all-natural herbal supplement designed to promote weight loss. To monitor her progress Penny keeps a diary in which she records things such as how she feels and what she eats each day. After 30 days Penny weighs herself and finds she has lost 15 pounds! She's thrilled with the results and decides to become a Fat-Away distributor. In her sales pitch to prospective clients, Penny describes how well Fat-Away worked for her.
What's wrong with Penny's thinking? What additional information would you need to be convinced that Fat-Away causes weight loss?

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Definitions:

Annual Rate

The interest rate for a period of one year, often used as a standard measure for comparing the returns on investments.

Payment Today

A term typically used in finance that refers to an immediate transaction or payment that has to be made or is made at the current date.

Equal Payments

Regularly scheduled payments of the same amount over the term of a loan or mortgage.

Interest Annually

The amount of interest earned or paid over a one-year period, often expressed as a percentage of the principal.