Question

A and B set up some capital each for a company. A set up ₹ 5000 but we do not know how much B put up as capital. It is known that the profits were shared in the ratio 1:4 . What was the total capital set up by both A and B?

• A. ₹ 15000
• B. ₹ 20000
• C. ₹ 30000
• D. ₹ 25000

Answer 1

The correct option is D ₹ 25000

We know,
the ratio of profits = the ratio of investments

$\therefore$ The ratio of capitals set up by A and B are in the ratio 1:4.

Let the capital set up by A be x and that set up by B be 4x

We know,
x = 5000 (Capital set up by A)
$\Rightarrow$ 4x = 20000 (Multiplying both sides with 4)

$\therefore$ Capital set up by B is 4x i.e ₹ 20000

$\therefore$ Total capital set up by both = x + 4x
₹ 5000 + ₹ 20000 = ₹ 25000