A and B invest in a business in the ratio 5 : 7. After 4 months, C joins the business with an investment equal to the amount invested by A. At the end of one year, the total profit is ₹92,000. Find the sum (in ₹) of the shares of partners B and C.
- AOption (a)
₹64,400
- BOption (b)
₹66,800
- COption (c)
₹62,000
- DOption (d)
₹49,600
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Correct answer
₹62,000
Why this answer is correct
Shortcut Trick
Investment ratio of A : B : C = 5 : 7 : 5
Time period ratio of A : B : C = 12 : 12 : 8 = 3 : 3 : 2
Profit sharing ratio = (5 × 3) : (7 × 3) : (5 × 2) = 15 : 21 : 10
Total ratio units = 15 + 21 + 10 = 46 units
Sum of B and C shares = 21 + 10 = 31 units
Value = (31 ÷ 46) × 92,000 = 31 × 2,000 = ₹62,000
∴ The correct answer is ₹62,000.
Alternate Method
Given: Investment ratio A : B = 5 : 7. After 4 months, C joins with investment = A. Total profit = ₹92,000.
⇒ Let the initial investments of A and B be 5x and 7x.
⇒ Investment of C = Investment of A = 5x.
⇒ Time duration: A = 12 months, B = 12 months, C = (12 − 4) = 8 months.
⇒ Profit Ratio = (CapitalA × TimeA) : (CapitalB × TimeB) : (CapitalC × TimeC)
⇒ Profit Ratio = (5x × 12) : (7x × 12) : (5x × 8)
⇒ Profit Ratio = 60 : 84 : 40 = 15 : 21 : 10
⇒ Total profit units = 15 + 21 + 10 = 46 units.
⇒ Given, 46 units = ₹92,000.
⇒ 1 unit = 92,000 ÷ 46 = ₹2,000.
⇒ Sum of shares of B and C = (21 + 10) units = 31 units.
⇒ Sum = 31 × 2,000 = ₹62,000.
∴ The correct answer is ₹62,000.
Additional Information
Partnership Ratio Formula
The profit sharing ratio in a business is always calculated as P1 : P2 = (C1 × T1) : (C2 × T2), where C is capital and T is time.
Compound Partnership
When partners invest their capitals for different time periods, it is called a compound partnership.
Active vs Sleeping Partner
An active partner manages the business and may receive a salary or extra share, while a sleeping partner only invests money.