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Veronica from Georgia asks, "A guy wants to buy a car and borrow $50,000. He gets $25,000 from his mom and $25,000 from his sister. He buys the car for $45,000. Driving home he runs into a friend that ask to borrow $3,000. You are now left with $2,000. You pay your mom and sister back $1,000 each and now you owe them only $24,000 each. After you pay them the $48,000 total to both, your friend pays you the $3000 he owes you. Do you know why the total comes out to $51,000 instead of $50,000 that you originally started out with?"
Hi Vernoica, This problem is very similar to the bellboy "missing dollar" problem, which you can read about by clicking the image below:
I'm going to use a slightly different approach in explaining this problem, by focusing on the meaning of positives and negatives in the context of transactions. Every financial transaction has a "direction." It is from one person (or organization/business, etc) and to another. We use positives and negatives to indicate the direction of a transaction. We should choose a single individual as the focus for our problem, and once we've done that, every transaction will be signed based on whether the transaction is TO or FROM that person. In this case, the choice is obvious: the guy buying the car is the focus.
So let's agree that if a monetary transaction has "the guy" as the recipient, we'll call that transaction positive. If "the guy" is the giver, we'll call it a negative transaction. So we can list every transaction as a signed number:
Recieves $25,000 from his mother: +$25,000
Receives $25,000 from his sister: +$25,000
Buys car for $45,000: -$45,000
Lends $3000: -$3,000
Pay mother $1,000: -$1,000
Pay sister: $1,000: -$1,000
Pay mother $24,000: -$24,000
Pay sister: $24,000: -$24,000
Friend pays back loan of $3,000: +$3,000
So now that we have all of these transactions signed, we can add them up properly:
$25,000 + $25,000 - $45,000 - $3,000 - $1,000 - $1,000 - $24,000 - $24,000 + $3,000 = -$45,000
What does that -$45,000 represent? It represents the amount by which "the guy" has decreased his bank balance (the price of the car).
What does the number $51,000 represent? Absolutely nothing. Whoever gave you the problem picked three transactions out of the list of nine transactions, gave one of them the incorrect sign, and then combined them in a way that makes absolutely no sense in the context of the problem. Why would that add up to anything interesting? You got fooled into thinking it should mean something because it was so close to $50,000, which was a number that was mentioned in the problem. But adding those three quantities means absolutely nothing. When you give the numbers the correct signs, all the transactions cancel out to a single transaction - the cost of the car.