Questions to test your financial IQ

Question 1:
You take a loan of $500 from friend A.
You take a loan of $500 from friend B.
You use the $1000 to buy a watch which cost $880.
You are left with $120.

You return $40 to friend A
You return $40 to friend B
You are left with $40

Your debt for friend A is $460
Your debt for friend B is $460.
Your total debt is $920.
$920(in debt) + $40(you have left) = $960
Where is the missing $40?

Question 2:
You take a loan of $500 from friend A.
You take a loan of $500 from friend B.
You use the $1000 to buy a watch which cost $900.
You are left with $100.

You return $20 to friend A
You return $20 to friend B
You are left with $60

Your debt for friend A is $480
Your debt for friend B is $480
Your total debt is $960

$960(in debt) + $60(you have left) = $1020
Where does the extra $20 come from?

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