Two friends A and B started a business by investing Rs. 150000 and Rs. 250000, respectively. After a year, the profit earned was Rs. 600000. Each added Rs. 50000 to their profits a... Two friends A and B started a business by investing Rs. 150000 and Rs. 250000, respectively. After a year, the profit earned was Rs. 600000. Each added Rs. 50000 to their profits and invested in a different project. If this project gave a yield of Rs. 420000, then A's share in the profit is:
Understand the Problem
The question is asking to determine A's share in the profits after two friends, A and B, invested different amounts in a business and later invested additional profits into another project. We need to calculate the profit ratio based on their investments and the yields from the new project.
Answer
A's share in the profit is Rs. 390,000.
Answer for screen readers
A's total share in the profit is Rs. 390,000.
Steps to Solve
- Calculate the initial investment ratio between A and B
A's investment = Rs. 150,000
B's investment = Rs. 250,000
Total investment = A's + B's = Rs. 150,000 + Rs. 250,000 = Rs. 400,000
The ratio of their investments is:
$$ \text{Ratio of A to B} = \frac{150000}{250000} = \frac{3}{5} $$
- Determine the profit distribution
Total profit earned in a year = Rs. 600,000
Using the ratio of their investments, we can find A's share of the profit:
A's share of profit =
$$ 600000 \times \frac{3}{8} = 225000 $$
B's share of profit =
$$ 600000 - 225000 = 375000 $$
- Calculate the additional investment from profits
Each friend adds Rs. 50,000 to their respective profits before investing in a new project.
A's new investment = A's share + Rs. 50,000 = Rs. 225,000 + Rs. 50,000 = Rs. 275,000
B's new investment = B's share + Rs. 50,000 = Rs. 375,000 + Rs. 50,000 = Rs. 425,000
- Calculate the total yield from the second project
Total yield from the new project = Rs. 420,000
- Calculate the profit distribution from the new project based on the new investment
Total new investment = A's new investment + B's new investment = Rs. 275,000 + Rs. 425,000 = Rs. 700,000
A's share from the yield:
$$ \text{A's portion} = 420000 \times \frac{275000}{700000} $$
- Compute A's profit share from the new project
$$ A's share = \frac{420000 \times 275000}{700000} $$
Calculate A's share:
$$ = 420000 \times 0.392857 \approx 165000 $$
- Calculate A's total profit after both investments
Total profit for A = A's share from initial profit + A's share from the new project
$$ = 225000 + 165000 $$
Calculate the total:
$$ Total A's profit = 390000 $$
A's total share in the profit is Rs. 390,000.
More Information
This profit reflects A's share from both the initial business and the subsequent project, combined with the additional amount invested.
Tips
- Not calculating the ratio of investments correctly.
- Forgetting to add the initial profit distribution before calculating the new investments.
- Miscalculating the share from the yield of the new project based on the new investment ratio.