A, B and C are partners in a business. A, whose money has been used for 4 months, claims \(\frac{1}{8}\) of the profit. B, whose money has been used for 6 months, claims \(\frac{1}{3}\) of the profit. C had invested ₹ 1560 for 8 months. How much money did A contribute?
- AOption (a)
₹810
- BOption (b)
₹794
- COption (c)
₹720
- DOption (d)
₹690
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Correct answer
₹720
Why this answer is correct
Shortcut Trick
Ratio of Profit shares A : B : C = 1/8 : 1/3 : 13/24 = 3 : 8 : 13 (taking LCM 24).
Investment × Time = Profit ⇒ (AInv × 4) : (CInv × 8) = 3 : 13.
⇒ (AInv × 4) ÷ (1560 × 8) = 3 ÷ 13.
⇒ 4 × AInv = (3 × 12480) ÷ 13 = 2880.
⇒ AInv = 2880 ÷ 4 = 720.
∴ The correct answer is ₹720.
Alternate Method
Given:
A's time (TA) = 4 months, Profit share (PA) = 1/8
B's time (TB) = 6 months, Profit share (PB) = 1/3
C's time (TC) = 8 months, Investment (IC) = ₹1560
Calculations:
Total profit share = 1
⇒ C's profit share = 1 − (1/8 + 1/3)
⇒ C's profit share = 1 − (3 + 8)/24 = 1 − 11/24 = 13/24
The ratio of profits of A and C:
⇒ PA : PC = 1/8 : 13/24 = 3/24 : 13/24 = 3 : 13
Since Investment × Time = Profit:
⇒ (IA × TA) ÷ (IC × TC) = PA ÷ PC
⇒ (IA × 4) ÷ (1560 × 8) = 3 ÷ 13
⇒ 4 × IA ÷ 12480 = 3 ÷ 13
⇒ 4 × IA = (3 × 12480) ÷ 13
⇒ 4 × IA = 3 × 960
⇒ 4 × IA = 2880
⇒ IA = 2880 ÷ 4 = 720
∴ The correct answer is ₹720.
Additional Information
Partnership Profit Rule
In a partnership, the profit is distributed among partners in the ratio of the product of their capital and time period (Profit = Investment × Time).
Compound Partnership
When partners invest different amounts for different periods of time, it is called a compound partnership. The ratio of their effective capitals determines the profit share.
Investment Calculation
Individual investment can be found using the formula: Investment = Profit ÷ Time. If profit shares and times are known, the investment ratio is (P1/T1) : (P2/T2).