mediumlogic

A man decides to buy a nice horse. He pays $600 for it and he is very content with this strong animal. After a year the value of the horse has increased to $700 and he decides to sell the horse. But a few days later he regrets his decision so he buys back the horse again. Unfortunately he has to pay $800 to get it back so he loses $100. After another year of owning the horse he finally decides to sell the horse for $900. What is the overall profit the man makes?

The man makes an overall profit of $200.

Why this works

To solve this riddle, we break down the transactions step by step. Initially, the man buys the horse for $600 and later sells it for $700, making a profit of $100 at that point. When he buys it back for $800, he incurs a loss of $100 overall from that transaction. However, when he finally sells the horse for $900, he makes another profit of $100 on top of the $100 he had previously gained. Thus, when we add the final profit from the last sale ($100) to the initial profit before buying it back ($100), his overall profit comes to $200. The trick lies in keeping track of each transaction's gains and losses, showing that profit can accumulate through multiple exchanges.

Common Wrong Answers

“He breaks even.”

While the man initially loses $100 when buying back the horse, his final sale price of $900 leads to a total profit of $200, not breaking even.

“He loses $100.”

Although he does lose $100 when repurchasing the horse, this does not account for the profit made from the final sale, which results in a total profit of $200.

“He makes $300 profit.”

This guess incorrectly adds the profits from both transactions without accounting for the loss incurred when buying back the horse. The correct profit is $200.

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