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Mary and Mike enter into a partnership by investing $700 and $300 respectively. At the end of one year, they divided their profits such that a third of the profit is divided equally for the efforts they have put into the business and the remaining profit is divided in the ratio of the investments they made in the business. If Mary received $800 more than Mike did, what was the profit made by their business in that year?
  • a)
    $2000
  • b)
    $6000
  • c)
    $4000
  • d)
    $1333
  • e)
    $3000
Correct answer is option 'E'. Can you explain this answer?
Most Upvoted Answer
Mary and Mike enter into a partnership by investing $700 and $300 resp...
Step 1: Deduce profit for Effort and Investments
Total profit earned will be divided into two parts: 1/3 will be for efforts and 2/3 for investments made.
Mary and Mike get equal share for their efforts.
If x is the share that each of Mike and Mary get for efforts, 2x is the share of profit for total efforts.
1/3 of total profit goes toward effort.
Hence, the total profit earned will be 6x.
Step 2: Share of profit for investments made
4x is the profit to be distributed for investments made.
4x will be divided in the ratio of amount invested by Mary and Mike.
As Mary and Mike invested $700 and $300 respectively, share of profit on investments will be divided in the ratio 7 : 3
Hence, if Mary receives 7y, Mike will receive 3y.
Total profit on investments is 10y which is equal to 4x
10y = 4x ... (1)
Step 3: Compute total profit earned
Difference between amount shared between Mike and Mary is $800.
7y − 3y = 800
y = $200
Total profits on investment 10y = 2000
From equation 1, 10y = 4x
So, x = 2000/4 = $500
Total profit earned 6x = $3000
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Community Answer
Mary and Mike enter into a partnership by investing $700 and $300 resp...
Let's assume that the total profit made by the business in one year is 'P'.

Determining the Amount Divided Equally:
Since a third of the profit is divided equally, we can find this amount by dividing the total profit by 3. Therefore, the amount divided equally is P/3.

Determining the Ratio of Investments:
Mary invested $700, and Mike invested $300. Therefore, the ratio of their investments is 700:300, which simplifies to 7:3.

Determining the Ratio of Profit Distribution:
As per the given information, Mary received $800 more than Mike did. Let's assume that Mike received 'x' dollars. Therefore, Mary received 'x + 800' dollars.

Using the ratio of their investments (7:3), we can set up the following equation:

(x + 800)/x = 7/3

Solving this equation, we find that x = 1200.

Determining the Total Profit:
Now that we know Mike received $1200, we can calculate the total profit as follows:

Total Profit = Amount Divided Equally + Amount Divided in Ratio of Investments
P = P/3 + (1200 + 800) = P/3 + 2000

Simplifying this equation, we find that P/3 = 2000.

Multiplying both sides of the equation by 3, we get P = 6000.

Therefore, the profit made by their business in that year is $6000.

Hence, the correct answer is option (E).
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Mary and Mike enter into a partnership by investing $700 and $300 respectively. At the end of one year, they divided their profits such that a third of the profit is divided equally for the efforts they have put into the business and the remaining profit is divided in the ratio of the investments they made in the business. If Mary received $800 more than Mike did, what was the profit made by their business in that year?a)$2000b)$6000c)$4000d)$1333e)$3000Correct answer is option 'E'. Can you explain this answer?
Question Description
Mary and Mike enter into a partnership by investing $700 and $300 respectively. At the end of one year, they divided their profits such that a third of the profit is divided equally for the efforts they have put into the business and the remaining profit is divided in the ratio of the investments they made in the business. If Mary received $800 more than Mike did, what was the profit made by their business in that year?a)$2000b)$6000c)$4000d)$1333e)$3000Correct answer is option 'E'. Can you explain this answer? for GMAT 2024 is part of GMAT preparation. The Question and answers have been prepared according to the GMAT exam syllabus. Information about Mary and Mike enter into a partnership by investing $700 and $300 respectively. At the end of one year, they divided their profits such that a third of the profit is divided equally for the efforts they have put into the business and the remaining profit is divided in the ratio of the investments they made in the business. If Mary received $800 more than Mike did, what was the profit made by their business in that year?a)$2000b)$6000c)$4000d)$1333e)$3000Correct answer is option 'E'. Can you explain this answer? covers all topics & solutions for GMAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Mary and Mike enter into a partnership by investing $700 and $300 respectively. At the end of one year, they divided their profits such that a third of the profit is divided equally for the efforts they have put into the business and the remaining profit is divided in the ratio of the investments they made in the business. If Mary received $800 more than Mike did, what was the profit made by their business in that year?a)$2000b)$6000c)$4000d)$1333e)$3000Correct answer is option 'E'. Can you explain this answer?.
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