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.

-20.00
+30.00
_______
+10.00
-40.00
_______
-30.00
+50.00
_______
+20.00
-60.00
_______
-40.00

It looks as if Mike lost 40.00 but you must count the initial 20.00 Mike paid for the bike. So Mike lost money in deciding to keep the bike, but he'd have lost at least 20.00 (the same 20.00 he paid for the bike originally and WOULDN'T HAVE the bike) had he not decided to keep it.

Posted by Andre on 2003-08-04 12:21:24