On January 2nd, 1900, Ringo and Bingo, two hardworking guys of your species were offered the same job at the Acme Loading Dock Company. They were told the starting pay would be $2000 per year, and the job will go to the man the company thinks is the smartest. To show their smarts, Ringo and Bingo have to pick the best raise schedule for themselves. Go on to see their raise choices.
They can get:
1) a $500 raise every 6 months or
2) a $2000 raise every year.
Ringo chooses 1), and Bingo chooses 2).
Which one got the job?
Ringo Bingo In earns earns 1900, 1st 6 months $1000 $1000
Ringo gets his $500 raise. 2nd 6 months $1500 $1000
Ringo gets his 2nd raise. 1901, 1st 6 months $2000 $2000 Bingo gets his $2000 raise ($1000 extra each 6 months for the year).
Ringo gets another raise. 2nd 6 months $2500 $2000
Ringo gets a $500 raise. 1902, 1st 6 months $3000 $3000 Bingo gets a $2000 raise.
Ringo gets his $500 raise. 2nd 6 months $3500 $3000 Total for 3 years $13,500 $12,000
Ringo makes $500 more every year than Bingo. Does this make any common sense?
Pick one:
1) The names Ringo/Bingo confuse the mind.
2) Raise amounts are multiples of $500.
3) It shows how compound interest can distort totals.
4) It's a trick.
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2)
3)
4)
A. What are Iowa farm families afraid of? 1) Rats in the barn 2) Fox in the henhouse 3) Bats in the belfry 4) Tornados B. What movie did my master see with a copper kettle? 1) Fantasia 2) The 13 Steps 3) Bambi 4) The Song of the South C. What world was used to show why we shouldn't limit our space and imagination to three dimensions? 1) Disney World 2) Flatland 3) Sea World 4) Wild, Wild West
It's an open book quiz, so the answers can be found for:
A. by going to Chapter 1-page 6
B. in Chapter 2-page 13
C. in Chapter 3-page 54
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2)
3)
4)
1)
2)
3)
4)
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2)
3)
4)
The trick is that the type of raise is not clear. When we say a $2000 raise we assume it's an annual rate increase. Which means the next year the worker will get $1000 more in the first six months and $1000 more in the second six months. That's how Bingo must have been thinking.
But the statement about a $500 raise every six months is misleading. To get $500 more in the second six months means Ringo actually got a $1000 ANNUAL raise there, six months ahead of Bingo. Then to make things worse, the next $500 increase gives Ringo an equivalent $2000 annual raise to start the next year. So you see Bingo is actually the smart one here, seeing the mistake all along.
But wait. Didn't we say the job would go to the smartest guy. And now we're saying Bingo was the smartest. Go on to find out the rest of the story.
We didn't say the job would go to the smartest guy. We said the job would go the guy who the company thought was the smartest.
It turns out the Acme Loading Dock Company filed bankruptcy in 1905.(They apparently weren't as smart as Bingo.)
Now you know why I was up in that tree.
So you couldn't get to me!!
(Refresh the screen if you want to see the teaser again.)