This Thursday Thinker about buying selling a horse often trips kids up, but here are a few ways to break it down that might mae it easier to understand.
You buy the horse for $300 then sell for $320. You buy back for $350 and sell it one more time for $375.
The answer is that you would make $45.
1. One way to look at it is that in the first transaction you make $20 and in the second you make $25 for a total of $45 profit.
2. Because not all kids’ brains work the same way, here is another way to explain the $45 profit. Break up the money into how much was spent and how much was taken in. You spent $300 and $350 on the horse for a total of $650 spent. You made $320 and $375 on the horse for a total of $695 brought in.
Subtract your cost from what you brought in ($695 – $650) and you end up with $45 in profit.
Remember, there is often more than one correct way to come up with a correct answer!