P and Q started a business investing amounts of 25,000 Rs and 75,000 Rs. Q left the business after 6 months. Q’s share in profit was Rs. 6000 at the end of the year, Then what is the total profit earned by them together?
- AOption (a)
Rs 10,000
- BOption (b)
Rs 12,000
- COption (c)
Rs 14,000
- DOption (d)
Rs 1,000
- EOption (e)
None of these
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Correct answer
Rs 10,000
Why this answer is correct
Shortcut Trick
Ratio of Profit = Ratio of (Investment × Time).
Profit Ratio P : Q = (25,000 × 12) : (75,000 × 6) = (1 × 12) : (3 × 6) = 12 : 18 = 2 : 3.
Given Q’s share (3 units) = Rs. 6,000 ⇒ 1 unit = Rs. 2,000.
Total profit (2 + 3 = 5 units) = 5 × 2,000 = Rs. 10,000.
∴ The correct answer is Rs. 10,000.
Alternate Method
Given: P’s investment = Rs. 25,000, Time = 12 months; Q’s investment = Rs. 75,000, Time = 6 months; Q’s profit = Rs. 6,000.
Formula: Profit1 ÷ Profit2 = (Investment1 × Time1) ÷ (Investment2 × Time2)
⇒ Ratio of Profit P : Q = (25000 × 12) : (75000 × 6)
⇒ Ratio P : Q = 300,000 : 450,000 = 30 : 45 = 2 : 3
⇒ Let P’s profit be 2x and Q’s profit be 3x.
⇒ 3x = 6000 ⇒ x = 2000
⇒ Total Profit = 2x + 3x = 5x = 5 × 2000 = Rs. 10,000
∴ The correct answer is Rs. 10,000.
Additional Information
Partnership Basics
In a partnership, if the period of investment is different, it is called a compound partnership where profit is shared in the ratio of the products of capital and time.
Ratio Proportionality
If Investment is constant, Profit ∝ Time. If Time is constant, Profit ∝ Investment.