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Two businessmen A and B invest in a business in the ratio 5 ∶ 8. They decided to reinvest 30% of the profit they earned back into the business. The remaining profit they distributed amongst themselves. If A's share of the profit was Rs. 87,500 then how much profit (in Rs.) did the business make?
- a)227000
- b)250000
- c)375000
- d)325000
Correct answer is option 'D'. Can you explain this answer?
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Verified Answer
Two businessmen A and B invest in a business in the ratio 5 ∶ 8....
Since Ratio of investment = 5 ∶ 8,
⇒ Ratio of profit distribution will also be = 5 : 8
Let us take the total profit = P
Since they decided to reinvest the 30% profit so remaining profit that is been distributed = 0.7P
⇒ A's share in the profit = 5/13 × 0.7P
⇒ 7P/26 = 87500
∴ P = Rs. 325000
Most Upvoted Answer
Two businessmen A and B invest in a business in the ratio 5 ∶ 8....
Given:
- Ratio of investment by businessmen A and B is 5:8
- They reinvest 30% of the profit back into the business
- As share of the profit is Rs. 87,500
To find:
- The profit made by the business
Assumptions:
- Let the initial investment of A be 5x and B be 8x
- Let the total profit be P
Calculations:
1. The ratio of investment implies that the profit will also be divided in the same ratio. So, the profit share of A is (5/13)P and the profit share of B is (8/13)P.
2. It is given that A's profit share is Rs. 87,500. So, (5/13)P = Rs. 87,500.
Solving this equation, we get P = (13/5) * Rs. 87,500.
3. Now, let's calculate the reinvestment amount. They reinvest 30% of the profit back into the business.
Reinvestment amount = 0.3 * P = 0.3 * (13/5) * Rs. 87,500.
4. The remaining profit is distributed amongst themselves. So, the amount distributed to A is A's profit share minus the reinvestment amount.
Amount distributed to A = (5/13)P - 0.3 * (13/5) * Rs. 87,500.
5. The remaining amount is distributed to B.
Amount distributed to B = Total profit - Amount distributed to A.
6. Total profit = Amount distributed to A + Amount distributed to B.
Final Answer:
The profit made by the business is Rs. 325,000 (Option D).
- Ratio of investment by businessmen A and B is 5:8
- They reinvest 30% of the profit back into the business
- As share of the profit is Rs. 87,500
To find:
- The profit made by the business
Assumptions:
- Let the initial investment of A be 5x and B be 8x
- Let the total profit be P
Calculations:
1. The ratio of investment implies that the profit will also be divided in the same ratio. So, the profit share of A is (5/13)P and the profit share of B is (8/13)P.
2. It is given that A's profit share is Rs. 87,500. So, (5/13)P = Rs. 87,500.
Solving this equation, we get P = (13/5) * Rs. 87,500.
3. Now, let's calculate the reinvestment amount. They reinvest 30% of the profit back into the business.
Reinvestment amount = 0.3 * P = 0.3 * (13/5) * Rs. 87,500.
4. The remaining profit is distributed amongst themselves. So, the amount distributed to A is A's profit share minus the reinvestment amount.
Amount distributed to A = (5/13)P - 0.3 * (13/5) * Rs. 87,500.
5. The remaining amount is distributed to B.
Amount distributed to B = Total profit - Amount distributed to A.
6. Total profit = Amount distributed to A + Amount distributed to B.
Final Answer:
The profit made by the business is Rs. 325,000 (Option D).
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Two businessmen A and B invest in a business in the ratio 5 ∶ 8. They decided to reinvest 30% of the profit they earned back into the business. The remaining profit they distributed amongst themselves. If A's share of the profit was Rs. 87,500 then how much profit (in Rs.) did the business make?a)227000b)250000c)375000d)325000Correct answer is option 'D'. Can you explain this answer?
Question Description
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