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 Friday, July 12, 2024
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# Household Math: What Happened to the Other Dollar?

 Scott Bilker is the founder of DebtSmart.com and author of the best-selling books, Talk Your Way Out of Credit Card Debt, Credit Card and Debt Management, and How to be more Credit Card and Debt Smart. Receive the 5-Year Loan Spreadsheet when you subscribe to his email newsletter.

Three men checked into a hotel room and were charged \$30 for which they paid \$10 each. The next day, the manager realized that the men had been overcharged since the real price is \$25 for the room. The manager gave the bellhop \$5 to return to the three men. On the way to their room the bellhop decided to keep \$2 for himself so he wouldn’t have to make change. The bellhop gave \$1 to each man. The three men had now paid \$9 each, or a total of \$27. This, plus the \$2 the bellhop kept for himself, makes a total of \$29. What happened to the other dollar?

Nothing happened to the dollar. All the money is still there. Yes, they each ended up paying \$9 each for a total of \$27. Plus the \$3 they got back is a total of \$30–it’s all there. They were supposed to pay \$25 but they paid \$27, which makes sense because the bellhop kept \$2.

Charges:
\$25 for the room + \$2 for the bellhop=\$27
\$30 initial charge – \$3 refund = \$27
Each paid \$9 and \$9 x 3 = \$27

The trick is in the statement, “The three men had now paid \$9 each, or a total of \$27. This plus the \$2 the bellhop kept for himself makes a total of \$29.”

The \$27 is the total payment and \$2 is a cost, not a payment! It just happens to add up to \$29 giving the illusion of a missing dollar.

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