A and B entered into a partnership where A invested βΉx and B invested βΉ(x + 500) for one year. At the end of the year, the profit of A is 1/6th less than the profit of B. What is the value of x?
- AOption (a)
βΉ1000
- BOption (b)
βΉ1500
- COption (c)
βΉ2000
- DOption (d)
βΉ2500
- EOption (e)
βΉ3000
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Correct answer
βΉ2500
Why this answer is correct
Shortcut Trick
Profit ratio of A : B is derived from the statement 1/6th less: If B = 6, then A = 6 β 1 = 5.
Ratio of profits PA : PB = 5 : 6. Since time is the same (1 year), Profit ratio = Investment ratio.
Difference in ratio parts = 6 β 5 = 1 unit. Given investment difference = βΉ500.
β΄ 1 unit = βΉ500. Value of x (A's investment) = 5 units = 5 Γ 500 = βΉ2500.
β΄ The correct answer is βΉ2500.
Alternate Method
Given: A's Investment = βΉx, B's Investment = βΉ(x + 500), Time = 1 year.
Formulas: Profit = Investment Γ Time | Profit Ratio = (I1 Γ T1) : (I2 Γ T2)
β Let B's profit be PB. Then A's profit PA = PB β (1/6)PB = (5/6)PB.
β PA / PB = 5 / 6.
β Since time is equal, x / (x + 500) = 5 / 6.
β 6x = 5(x + 500) β 6x = 5x + 2500.
β x = 2500.
β΄ The correct answer is βΉ2500.
Additional Information
Partnership Ratios
When the time period for all partners is the same, the profit is distributed solely in the ratio of their investments.
Fractional Change
If a value is 1/n less than another, it is represented as (1 β 1/n) of that value, or (n β 1)/n.
