Three people check into a hotel. They pay $30 to the manager and go to their room. The manager finds out that the room rate is $25 and gives $5 to the bellboy to return. On the way to the room, the bellboy reasons that $5 would be difficult to divide among three people, so he keeps $2 and gives $1 to each person. Now, each person paid $10 and got back $1. So they paid $9 each, totalling $27. The bellboy has $2, that adds up to $29. Where is the remaining dollar?
There is no missing dollar. Three people have paid $27 and have kept $3 for themselves and that adds up to $30. The trick is that you are not supposed to ADD the $2 to the $27 but you have to SUBTRACT them. If you do this, you arrive at $25, which is what the hotel received as payment.