Question Details

Directions: Solve the problem below and select the correct option.

Liam and Noah entered into a business partnership investing $X and $(X + 3000) respectively. After 4 months, Liam withdrew $2000 and Noah invested $3000 more. If the ratio of their profit shares at the end of one year is 20:39, find the initial amount invested by Noah.

Options

A

$12,500

B

$10,000

C

$11,000

D

$8,000

E

$9,500

Show Answer

Correct Answer :

Option C

$11,000

Solution :

The correct option is $11,000.

To find the initial amount invested by Noah, we need to calculate the equivalent total investment for both Liam and Noah over the entire 1-year (12-month) period, taking into account their mid-term withdrawals and additional investments.

Step 1: Define initial investments
Let Liam's initial investment be $X.
Since Noah invested $3000 more than Liam, Noah's initial investment is $(X + 3000).

Step 2: Calculate Liam's total effective investment
For the first 4 months, Liam's investment is $X.
After 4 months, Liam withdraws $2000, so his investment for the remaining 8 months (12 - 4 = 8 months) becomes $(X - 2000).
Liam's total investment in month-units is:

Liam's Total=4×X+8×(X-2000)
Liam's Total=4X+8X-16000=12X-16000

Step 3: Calculate Noah's total effective investment
For the first 4 months, Noah's investment is $(X + 3000).
After 4 months, Noah adds $3000 more, making his investment $(X + 3000 + 3000) = $(X + 6000) for the remaining 8 months.
Noah's total investment in month-units is:

Noah's Total=4×(X+3000)+8×(X+6000)
Noah's Total=4X+12000+8X+48000=12X+60000

Step 4: Set up the profit ratio equation
The ratio of their profit shares at the end of the year is given as 20:39:

12X-1600012X+60000=2039

Simplify the fraction on the left by dividing the numerator and denominator by 4:

3X-40003X+15000=2039

Now, cross-multiply to solve for X:

39×(3X-4000)=20×(3X+15000)
117X-156000=60X+300000
117X-60X=300000+156000
57X=456000
X=45600057=8000

Step 5: Determine Noah's initial investment
Since Noah's initial investment was $(X + 3000):

Noah's Initial Investment=8000+3000=11000

Therefore, the initial amount invested by Noah is $11,000.

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