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A New Consumer's Scan?

Carefully read the first line under the headline:
"Donate $25...and receive .25% off your loan rate."

Does this mean:
A 5% loan becomes 4.75% (i.e. 5% - .25%), or
A 5% loan becomes 4.9875% (i.e. 99.75% of 5%)

B.G. (Bellingam, WA) sent me this ad...with this note or new twist: "As you and I know most people think that .99 cents is 99 cents.... Well, here is what I would call a definite attempt to feed on those who really believe .99 cents. Note that the discount on interest rate is just one-fourth of a percent. I bet that most people will really believe they are getting a 25% reduction of the loan rate. Can you imagine the loan officer trying to argue with a prospective client once the real reduction is told? Although, it is possible that GaPac really meant the reduction to be 25% - Maybe!"