Question

Four friends A, B, C and D started a business and earned a profit of Rupees 30,000. They shared it according to their investment. A, B, C and D had invested in the ratio 2:5:4:3 What is the profit share of A and B together?

• A. 20000
• B. 15000
• C. 17000
• D. 7000

Answer 1

Answer:

B. 15000

Profit Sharing in Business

Understanding the Concept

• When multiple individuals invest in a business venture, the profit earned is typically distributed among them in proportion to their respective investments.

• This method ensures fairness, as those who contribute more capital are expected to receive a larger share of the profits.

Problem Breakdown

• The total profit earned is Rupees 30,000.

• Four friends, A, B, C, and D, invested in a business.

• Their investment ratio is given as 2:5:4:3. This means for every 2 units invested by A, B invested 5 units, C invested 4 units, and D invested 3 units.

• First, find the total number of parts in the ratio: 2 + 5 + 4 + 3 = 14 parts.

• Notice that A and B together have 7 parts out of the total 14 parts. This is exactly half of the total investment ratio.

• Therefore, their combined profit share will be exactly half of the total profit: 1/2 * 30,000 = 15,000.