I gave this problem to my students. So far none of them have been able to solve it. I can't blame them, it took me a long time to figure it out. So I thought I would share it with you all. After all, that is why we are here, to help share the madness.

If you figure it out you can pm me the answer, don't spoil it for others who are still working on it.

Here it is:

 Three people have lunch together.
 The bill is $25.
 They each pay $10.
 From $30 they get $5 change.
 They give a $2 tip to the waiter.
 That leaves $3.
 They give $1 back to each person.
 Each person has paid $9.
 $9 multiplied by 3 = $27.
 Plus the $2 tip = $29.
 Where did the extra $1 go?