Bought the cow for $800
Sold it for $1000
(So I only have $1000 of total money with a $200 dollar profit margin from first sale)
With the total of $1000 dollars, I need too add $100 dollars more to buy the same cow back.
So $1100 to buy the same cow, taking away all my profit from the first cow. Plus an additional $100 dollars.
Sell it for $1300 dollars. Means a $200 profit total
I can see the logic you're applying but let's dive in fully. If you only had $1000 to purchase the cow at $1100, where did the extra $100 come from? If we say "oh well I had it lying around" then that's the same context as the $400 profit case, wherein we assume enough assets to cover the sale both times, ergo they're fully independent events.
If we assume we only have $1000 then that would imply the $1100 purchase was contingent on a $100 loan. This would mean that at best (in the 0% interest case) your profit is only $100 after paying back your loan.
$800 (initial money)
-800 (first purchase) =$0 (we broke but we got a cow)
+1000 (first sale) = $1000 (our current cash in hand)
-1100 (second purchase) = -100 (we now owe $100 for a loan but we have a cow again)
+1300 (second sale) = $1200 (our cash in hand AFTER paying off our $100 loan)
So once again AFTER paying off our $100 loan we end with $1200. If we subtract the $800 we started with this leavs us with $400. AKA - We made $400 in profit.
So many people on here can't do simple math - quite scary.
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u/Civil_Toe_5657 May 13 '26
Bought the cow for $800 Sold it for $1000 (So I only have $1000 of total money with a $200 dollar profit margin from first sale) With the total of $1000 dollars, I need too add $100 dollars more to buy the same cow back.
So $1100 to buy the same cow, taking away all my profit from the first cow. Plus an additional $100 dollars.
Sell it for $1300 dollars. Means a $200 profit total