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.
Correct Answer :
$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:
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:
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:
Simplify the fraction on the left by dividing the numerator and denominator by 4:
Now, cross-multiply to solve for X:
Step 5: Determine Noah's initial investment
Since Noah's initial investment was $(X + 3000):
Therefore, the initial amount invested by Noah is $11,000.
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