A hostel has 900 residents. 40% of them come from the state the hostel stands in, and 30% of the remaining residents come from one neighbouring state. How many residents come from neither of these two states?

From the home state: 40% of 900 = 360, leaving 540. From the neighbouring state: 30% of those 540 = 162. So 540 - 162 = 378 come from neither. 270 takes the 30% on all 900 instead of on the 540 who remain. 540 forgets the second cut altogether, and 162 is the neighbouring-state count itself.