Question Details

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.

Options

A

₹25,600

B

₹35,000

C

₹33,600

D

₹28,800

Show Answer

Correct Answer :

Option A

₹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 x.
Since P's capital corresponds to 4 parts:

4x=40000

x=10000

Q's initial investment corresponds to 3 parts:

Q's initial capital=3×10000=₹30,000

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.

Investment for first 5 months=40000×5=₹2,00,000

After 5 months, P withdraws ₹8,000.
P's capital for the remaining 7 months (12 - 5 = 7 months):

New Capital of P=40000-8000=₹32,000

Investment for remaining 7 months=32000×7=₹2,24,000

Total equivalent investment of P for 1 month:

CP=200000+224000=₹4,24,000

Step 3: Calculate the total equivalent monthly investment for Q
For the first 5 months, Q's investment is ₹30,000.

Investment for first 5 months=30000×5=₹1,50,000

After 5 months, Q doubles his contribution.
Q's capital for the remaining 7 months:

New Capital of Q=30000×2=₹60,000

Investment for remaining 7 months=60000×7=₹4,20,000

Total equivalent investment of Q for 1 month:

CQ=150000+420000=₹5,70,000

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:

Ratio (P : Q)=424000:570000=424:570=212:285

Sum of total ratio parts:

Total Parts=212+285=497

Step 5: Compute P's share of the annual total profit
Total annual profit = ₹60,000.

P's share=212497×60000

P's share=12720000497₹25,593.56

Rounding to the nearest option value:

P's share₹25,600

Therefore, P's share in the total profit is ₹25,600.

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