A and B invest ₹50,000 and ₹70,000, respectively, in a business. After 1 year, the total profit is distributed, including simple interest a 10% per annum on the capital of each partner. If the total profit, including interest, is ₹18,000, what is A's share of the profit?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. ₹7,500.
Capital of A = 50,000
Capital of B = 70,000
Interest 10% for 1 year:
A’s interest = 5,000
B’s interest = 7,000
Total interest = 12,000
Total profit including interest = 18,000
So, remaining profit = 18,000 − 12,000 = 6,000
This 6,000 is divided in a ratio of capitals = 50,000 : 70,000 = 5 : 7
A’s share of 6,000 = 6000 × = 2,500
Total share of A = 5,000 + 2,500 = ₹7,500