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I did buy it on sale for the $5 price. So does that mean I can buy the new version for $5 to make it the full price of the new version or do I have to spend the full $10?

it doesn't add together... it just looks at what the highest amount you paid at once and compares that to the prices of the available downloads. I don't know if folks set sales and prices intentionally to manipulate this behavior, but it does make buying something on sale that isn't finished a bit unappealing since it likely means you'll have to buy an updated version later if it isn't ALSO on sale.