Liam and Noah started a joint business venture by investing $30,000 and $(30,000 + x), respectively. After six months, Noah withdrew 20% of his initial capital contribution. At the end of one year, the total profit earned by the business was $22,000, and Noah's share of the profit was $12,000. Find the value of 2x.
Correct Answer :
20000
Solution :
The correct option is 20000.
Step 1: Calculate Liam's effective investment for the year.
Liam invested $30,000 for the full 12 months.
Liam's total equivalent investment for 1 month:
Step 2: Calculate Noah's effective investment for the year.
Noah initially invested $(30,000 + x) for the first 6 months.
After 6 months, Noah withdrew 20% of his initial investment.
The remaining capital invested by Noah for the next 6 months is:
Noah's total equivalent investment for 1 month:
Step 3: Determine the profit sharing ratio.
Total profit earned at the end of 1 year = $22,000.
Noah's share of the profit = $12,000.
Liam's share of the profit:
The ratio of Liam's profit share to Noah's profit share is:
Step 4: Solve for x by equating the ratio of investments to the ratio of profits.
Since profit is distributed in the ratio of equivalent investments:
Cross-multiplying to solve for :
Step 5: Calculate the value of 2x.
Thus, the value of 2x is 20000.
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