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Hot air balloon A is rising upward at a rate of 10.0 m/s. A passenger aboard balloon A observes balloon B going down at a relative rate of 12.5 m/s. What is the velocity of balloon B relative to the ground? Assume that up is positive.

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Since balloon A is going up at 10 m/s and balloon B looks like it is going down 12.5 m/s , then from the ground it will look like the balloon B is coming down at 12.5 - 10 = 2.5 m/s

Think of it like this. If there was a stationery point on the cliff next to a balloon, the point on the cliff would appear to be going down at 10 m/s to balloon A even though it is stationary. So if it looks like it s 12.5 m/s to the balloon going up then to someone on the ground it is only dropping another 2.5 m/s
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