Partnership profit handling with donation and reinvestment — Pankaj and Sushil invest in the ratio 3:5 for the same period. At year-end, 20% of total profit is donated to the AIDS Control Society of India; of the remaining 80%, 75% is reinvested and the balance (i.e., 25% of 80%) is divided as interest on capitals in the 3:5 ratio. If the difference in their distributed shares is ₹ 1200, find the total profit for the year.

Difficulty: Medium

Correct Answer: 24000

Explanation:


Introduction / Context:
This partnership problem tests layered profit treatment: a charitable donation, reinvestment, and then distribution of the remaining portion based on capital ratio. Only the finally distributed portion generates the ₹ 1200 difference between partners’ shares. We reverse the steps to retrieve the total annual profit.


Given Data / Assumptions:

  • Investment ratio (Pankaj:Sushil) = 3:5.
  • Donation = 20% of total profit.
  • Of the remaining 80%, 75% is reinvested; 25% is distributed as interest on capitals.
  • Difference in distributed shares = ₹ 1200.


Concept / Approach:
Let total profit be P. The distributable part after donation and reinvestment is 25% of 80% of P = 0.20P. Shares are in 3:5. Compute the difference between 5/8 and 3/8 of 0.20P, set it equal to ₹ 1200, and solve for P.


Step-by-Step Solution:

Distributable amount D = 0.25 * 0.80 * P = 0.20P.Pankaj’s share = (3/8) * D = 0.075P; Sushil’s share = (5/8) * D = 0.125P.Difference = 0.125P − 0.075P = 0.05P.Given 0.05P = 1200 ⇒ P = 1200 / 0.05 = 24000.


Verification / Alternative check:
Plugging back: D = 0.20 * 24000 = 4800. Shares: Pankaj 1800, Sushil 3000; difference = 1200 (matches).


Why Other Options Are Wrong:
18000 and 20000 do not produce a ₹ 1200 difference under the given proportions. “None of these” is unnecessary since 24000 fits exactly.


Common Pitfalls:
Distributing the entire 80% instead of only 25% of it, or mistakenly applying the 3:5 split before donation/reinvestment deductions.


Final Answer:
24000

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