P, Q, and R started a business. P is the working partner and receives a monthly salary of $2,000 from the total profits. The remaining profits are divided among the three in proportion to their investments. P, Q, and R invested $50,000, $60,000, and $70,000, respectively. If P's total earnings at the end of the year were $40,000, what was the total profit?
Show answer & explanation
Correct answer: C
Explanation
Given:
P's monthly salary = $2,000
Time = 12 months
Investments of P, Q, R = 50,000, 60,000, 70,000
P's total salary = 2,000 × 12 = 24,000
P's total earnings = 40,000
Hence, P's share of the profit = 40,000 − 24,000 = 16,000
Investment ratio:
P : Q : R = 50,000 : 60,000 : 70,000 = 5 : 6 : 7
Total share = 5 + 6 + 7 = 18
P's share = 5/18
Now
(5/18) × remaining profit = 16,000
Remaining profit = 16,000 × 18 / 5 = 57,600
Total profit = remaining profit + P's salary
= 57600 + 24000 = $81,600