- I found 100$ floating in the water
Why is “in” placed instead of “on” the water.
I thing they are on the surface of the water not in.
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I think they are on the surface of the water, not in.
You are incorrect; the bills are both.
The phrase in the water is idiomatic. If we don't want children to swim, we might say, "Don't go in the water." Even though algae usually floats at the surface, you can see from this ngram that most writers prefer to talk about algae in the water, as opposed to algae on the water.
There would be absolutely nothing wrong with saying the money is on the water; the phrase on the water means "on the surface of the water," and clearly the bills in the image are floating.
However, your thinking veered into the wrong when you presumed that in the water was incorrect; in fact, "in the water" can mean anywhere in the water – submerged, floating, or a mixture of both.
on would certainly the right word for most of the notes in the picture because they are on the surface. There are several that are below the surface, though, and in the water would be a better word to use.
floating in water does occur, but there are certainly many more occurrences of floating in space than floating in water/the sea/a river. This is because space does not have a surface to float on.
Try to understand these two sentences:
So, you cannot say that one sentence is good and other one is wrong. Because usage of prepositions depends on context of the sentences.