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Einstein's Challenge

The easiest way to solve this puzzle is start with a grid and begin filling it in with clues. Clues 8 and 9 allow us to fill in cells directly:

House 1 House 2 House 3 House 4 House 5
Nationality Norwegian        
Color          
Pet          
Beverage     Milk    
Cigarettes          

Clue 14 places the blue house next to the Norwegian, and the green and white houses as 4 and 5 (not 3 and 4 because clue 5 has the green house owner drinking coffee).

House 1 House 2 House 3 House 4 House 5
Nationality Norwegian        
Color   Blue   Green White
Pet          
Beverage     Milk Coffee  
Cigarettes          

Clue 1 says that the Brit lives in a red house, which rules out all but 3. By process of elimination, the first house is yellow. Clue 7 adds to this the fact that the owner smokes Dunhills.

House 1 House 2 House 3 House 4 House 5
Nationality Norwegian   Brit    
Color Yellow Blue Red Green White
Pet          
Beverage     Milk Coffee  
Cigarettes Dunhill        

Clue 11 places horses next to the Dunhill house. The beer drinker smoke Blue Master, the Dane drinks tea, and Milk and Coffee are in houses 3 and 4. So the Norwegian, who smokes Dunhill, drinks water. And the water drinker's neighbor smokes blend. With the only beverages remaining being tea and beer, and knowing that the beer drinker smokes Blue Master, the second house has the tea drinking Dane.

House 1 House 2 House 3 House 4 House 5
Nationality Norwegian Dane Brit    
Color Yellow Blue Red Green White
Pet   Horses.      
Beverage Water Tea Milk Coffee  
Cigarettes Dunhill Blend      

The last beverage, beer, goes in house 5 with it's Blue Masters. The German Prince-smoker must therefore be in House 4. This leaves the Swedish dog owner for House 5, then the bird-rearing Pall Mall smoker for House 3.

House 1 House 2 House 3 House 4 House 5
Nationality Norwegian Dane Brit German Swede
Color Yellow Blue Red Green White
Pet   Horses Birds   Dog
Beverage Water Tea Milk Coffee Beer
Cigarettes Dunhill Blend Pall Mall. Prince Blue Mstr

Since the cat owner lived next the Blend smoker, we can see that there is only one slot left, in the German's house. So it is the German who keeps the fish.

House 1 House 2 House 3 House 4 House 5
Nationality Norwegian Dane Brit German Swede
Color Yellow Blue Red Green White
Pet Cats Horses Birds Fish Dog
Beverage Water Tea Milk Coffee Beer
Cigarettes Dunhill Blend Pall Mall. Prince Blue Mstr

And for the bonus, could Einstein have created this puzzle as written here at the end of the 19th century? While Einstein was a young man, he certainly could have posed some sort of puzzle similiar to this one. But we know definitively that he could not have presented as it is here in the 19th century, because of the cigarette brands. Alfred Dunhill didn't open up a tobacco shop until the early 20th century. Blue Masters weren't launched until 1937. Pall Mall cigarettes weren't introduced until 1939.

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