Mike wanted to buy a bike, and he found one he liked at $20, so he bought it. The next day, a friend saw it and offered $30 dollars for it so Mike agreed. He later bought it back for $40. Again someone saw it and offered $50 and again Mike sold it. Mike finally rebought the bike for good for $60. Mike then took it to a bike show where a man told him the bike was worth $40.

Deciding to keep it, did Mike gain or lose money on the transactions? Count the bikes worth in the problem.

(In reply to real answer by Steven Lu)

As Steven Lu states he initially had the bike for $20.  Had he sold it then for $40 he could have GAINED $20. Depending on semantics, if you perceive 'not gaining money when you have opportunity to' as 'losing money' then yes he lost $20.

It is like the stock market. People will say "Oh I just lost $1000 dollars because my stock went down". Well until they sell it they really have not lost the money.

Posted by jduval on 2007-08-23 03:17:42