Question

A, B and C start a business in partnership in which A invests Rs. 5000, B invests Rs. 6000 and C invests Rs. 7000 for the same amount of time. Total profit earned by this business is Rs. 72,000. However, 50% of the total profit earned is saved by the company. The other 50% is split in between A, B and C in ratios of their capital. What is the profit share of A? [2 Marks]

Answer 1

Ratio of investment made by A, B and C = 5000 : 6000 : 7000 = 5 : 6 : 7
Total profit earned is Rs. 72,000.

Profit distributed among A, B and C is = $\frac{50}{100}\times 72,000=Rs.36,000$ [1 Mark]

A's share in the investment is $\frac{5}{5+6+7}=\frac{5}{18}$

Hence, from Rs. 36,000 A will get = $36,000\times \frac{5}{18}$ = Rs. 10,000

Hence, the profit share of A is Rs. 10,000. [1 Mark]