In what ratio should the profit of Rs.8000 be divided if X starts a business with an investment of Rs.20000, Y invests Rs.7500 for 4 months and Z invests Rs.15000 after 3 months from the start of the business.
Question
In what ratio should the profit of Rs.8000 be divided if X starts a business with an investment of Rs.20000, Y invests Rs.7500 for 4 months and Z invests Rs.15000 after 3 months from the start of the business.
Solution 1
The profit in a business is divided among the partners in the ratio of their investment multiplied by the time for which they invested.
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X invested Rs.20000 for the entire year. So, his share in the profit will be proportional to 20000*12 = 240000.
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Y invested Rs.7500 for 4 months. So, his share in the profit will be proportional to 7500*4 = 30000.
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Z invested Rs.15000 but only after 3 months from the start of the business. So, he effectively invested for 12-3 = 9 months. So, his share in the profit will be proportional to 15000*9 = 135000.
So, the ratio in which the profit of Rs.8000 should be divided is 240000:30000:135000.
This simplifies to 8:1:4.5 after dividing each term by 30000.
So, X should get 8/13.5 of the profit, Y should get 1/13.5 of the profit, and Z should get 4.5/13.5 of the profit.
Therefore, X should get Rs. (8/13.5)*8000 = Rs. 4740.74, Y should get Rs. (1/13.5)*8000 = Rs. 592.59, and Z should get Rs. (4.5/13.5)*8000 = Rs. 2666.67.
Solution 2
The profit in a business is divided among the partners in the ratio of their investment multiplied by the time for which they invested.
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X's investment is Rs. 20000 for 12 months (assuming the business runs for a year). So, X's share = 20000 * 12 = 240000
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Y's investment is Rs. 7500 for 4 months. So, Y's share = 7500 * 4 = 30000
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Z's investment is Rs. 15000 but he invested 3 months after the start of the business, so he invested for 9 months. So, Z's share = 15000 * 9 = 135000
So, the ratio in which the profit of Rs. 8000 should be divided is X:Y:Z = 240000:30000:135000 = 8:1:4.5
Therefore, X gets 8/13.5 * 8000 = Rs. 4740.74, Y gets 1/13.5 * 8000 = Rs. 592.59, and Z gets 4.5/13.5 * 8000 = Rs. 2666.67.
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