The initial borrowing of $100 is separate from the later transactions involving the $1 bills. The $1 kept by you was part of the $100 you initially borrowed and spent on the T-shirt. When you add the $1 you kept to the total amount owed to your parents ($49 + $49), you’re essentially double-counting the $1 you kept. In reality, that $1 has already been used and counted as part of the initial $100 borrowed, so there’s no need to add it again to the remaining debt.
In other words, the error in the reasoning comes from treating the $1 kept by you as if it’s additional money, when in fact it was already part of the $100 borrowed and used to purchase the T-shirt.
