Would you consider solving an algebraic expression that was a string as a word problem - ie
“$x * (5/25) + 10 * $y”
Of course it involved variable substitution, converting it to rpn, and then using the “Shunting Yard Algorithm”. I’ve had to do that twice. The second time I was maintaining a proprietary compiler/VM/IDE written in C++ for Windows CE. Yes, that was a dark time in my life.
(Without detracting from the fun anecdote, I think we're firmly astray from the original question or the further questions down-thread. The latter was about interview questions versus real-world problems. And no, I wasn't talking about algebraic expressions; I was talking about word games or puzzles, as given in interview questions.)
It depends on what your “world” is. If I’m being hired to write yet another software as a service CRUD app, then algorithm questions aren’t the “real world”. But, when I was being hired to do low level cross platform C without any third party libraries that we didn’t write ourselves or to maintain a compiler - algorithm type questions were appropriate.
In fact, we were writing custom document creation software and outputting to industrial printers at the first job where we were doing a lot of text processing.