Two partners, P and Q, initiate a commercial venture with their initial capitals in the ratio of 4:3. Five months into the business, P withdraws an amount of ₹8,000, while Q decides to double his contribution. Given that P's initial investment was ₹40,000 and the business generates an annual total profit of ₹60,000, determine P's share in the profit.
Correct Answer :
₹25,600
Solution :
The correct answer is ₹25,600.
Step 1: Determine the initial investments of P and Q
It is given that the initial capitals of P and Q are in the ratio 4 : 3.
P's initial investment = ₹40,000.
Let the common ratio multiplier be .
Since P's capital corresponds to 4 parts:
Q's initial investment corresponds to 3 parts:
Step 2: Calculate the total equivalent monthly investment for P
The commercial venture operates for 1 full year (12 months).
For the first 5 months, P's investment is ₹40,000.
After 5 months, P withdraws ₹8,000.
P's capital for the remaining 7 months (12 - 5 = 7 months):
Total equivalent investment of P for 1 month:
Step 3: Calculate the total equivalent monthly investment for Q
For the first 5 months, Q's investment is ₹30,000.
After 5 months, Q doubles his contribution.
Q's capital for the remaining 7 months:
Total equivalent investment of Q for 1 month:
Step 4: Determine the ratio of profit shares between P and Q
The total profit is divided in the ratio of their equivalent monthly investments:
Sum of total ratio parts:
Step 5: Compute P's share of the annual total profit
Total annual profit = ₹60,000.
Rounding to the nearest option value:
Therefore, P's share in the total profit is ₹25,600.
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