Buy for 60, sell for 70, buy back for 80, sell for 90

Question

A dealer buys a horse for 60, sells it for 70, buys it back for 80, and finally sells it for 90.

How much profit did he make in total? People give answers of 10, 20 and 30. Which is right, and why are the others wrong?

Accepted Answer

A profit of 20. The ledger. Start with the dealer's cash at 0. Buy for 60: cash minus 60. Sell for 70: cash +10. Buy for 80: cash minus 70. Sell for 90: cash +20. He ends with 20 more than he started and no horse. Profit 20. Two independent trades. Another way to see it: the first buy-and-sell earned 70 minus 60 = 10, and the second earned 90 minus 80 = 10. Total 20. The fact that it was the same horse is irrelevant. Why 10. Some people argue that "buying back for 80 after selling for 70" loses 10, cancelling the first profit, so only the last sale's 10 counts. But buying back at 80 is not a …

Buy for 60, sell for 70, buy back for 80, sell for 90

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