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  • Question
  • Two partners invest ? 125000 and ? 85000, respectively in a business and agree that 60% of the profit should be divided equally between them and the remaining profit is to be treated as interest on capital. If one partner gets ? 600 more than the other, find the total profit made in the business.


  • Options
  • A. ? 8800
  • B. ? 8885
  • C. ? 8995
  • D. ? 7875

  • Correct Answer
  • ? 7875 

    Explanation

    The difference counts only due to 40% of the profit which was distributed according to their investments.

    Let total profit = R.
    40% of R is distributed in the ratio, 125000 : 85000 = 25 : 17

    Share of 1st partner = 40% of R x25/(25 + 17)
    = 40% of 25R/42 = (40/100) x (25R/42) = 5R/21

    Share of 2nd partner
    = 40% of 17R/42 = (40/100) x (17R/42) = 17R/105

    Now according to the question
    5R/21 - 17R/105 = 600
    ? R(25 - 17)/105 = 600
    ? R = (600 x 105)/8
    = ? 7875


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