A, B and C invested Rs.10,000, Rs.12,000 and Rs.15,000 respectively to start a resort.P sees the growth of their business and then joins them after 8 months with Rs.6,000.They earn a profit of Rs.1560 at the end of the year.What would be difference of shares of profit of C and P?Rs.520Rs.640Rs.420Rs.450
Question
A, B and C invested Rs.10,000, Rs.12,000 and Rs.15,000 respectively to start a resort.P sees the growth of their business and then joins them after 8 months with Rs.6,000.They earn a profit of Rs.1560 at the end of the year.What would be difference of shares of profit of C and P?Rs.520Rs.640Rs.420Rs.450
Solution
The profit share of a business is usually divided according to the capital invested and the time for which the capital was invested.
Here, A, B and C invested Rs.10,000, Rs.12,000 and Rs.15,000 respectively for the entire year, while P invested Rs.6,000 but only for the last 4 months of the year (since P joined after 8 months).
So, the capital-time (C-T) products for A, B, C and P would be:
- A: 10,000 * 12 = 120,000
- B: 12,000 * 12 = 144,000
- C: 15,000 * 12 = 180,000
- P: 6,000 * 4 = 24,000
The total C-T product would be 120,000 + 144,000 + 180,000 + 24,000 = 468,000
The share of each person would be their C-T product divided by the total C-T product, multiplied by the total profit.
So, the share of C would be (180,000 / 468,000) * 1560 = Rs. 600 And the share of P would be (24,000 / 468,000) * 1560 = Rs. 80
Therefore, the difference in the shares of profit of C and P would be Rs. 600 - Rs. 80 = Rs. 520.
So, the correct answer is Rs.520.
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