Three people go to a hotel and rent a room, the room is 30 dollars for the night so they split it and pay 10 dollars each. After a while, the hotel owner remembers that he actually has a deal on tuesdays, that is 25 dollars for a room, and its tuesday, so he sends one of his staff members to go return the 5 dollars.
So he goes to return it, and the people who rented the room are happy that they were honest and didnt try to scam them, so they tip the staff member 2 dollars and they split the remaining 3 dollars between themselves, meaning they only spent 9 dollars each for the room.
So, they spent 9 dollars each, meaning they paid 27 dollars, and they gave the staff member a tip of 2 dollars, making the total to 29 dollars, Where did the last dollar go?
I'm not sure how resolved this already is - but they came in with $30. $25 went to the hotel, $2 went to the tips and $3 went back to themselves.
They spent $27, that's right. You don't count the $2 tip
again because that's already included (outgoing cashflows: 27 = 25 + 2), then $3 (30-27) change from their "$30 bill" is redistributed amongst themselves.
If you treat this like a chemical engineer treats transport processes (
balanced mass flows, energy flows, etc.), or like an accountant treats cash flows (probably the more relevant analogy):
Cashflow balance for groupout: $30
return: $-5
tips: $2
net cost: $27 (don't add +2 AGAIN)
Where did that $27 go?
$25 hotel
$2 tips
It's wrong to see it like "27 + 2 + 1(?)"
The "remaining last dollar" was remaining three dollars (one in each pocket).