Question Details

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.

Options

A

10000

B

20000

C

30000

D

25000

E

15000

Show Answer

Correct Answer :

Option B

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:

Liam's Investment=30000×12=360000

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:

(100-20)% of (30000+x)=0.8(30000+x)

Noah's total equivalent investment for 1 month:

Noah's Investment=6(<30000+x)+6×0.8(<30000+x)

=6(<30000+x)+4.8(<30000+x)

=10.8(<30000+x)

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:

Liam's Profit=22000-12000=10000

The ratio of Liam's profit share to Noah's profit share is:

Liam's ShareNoah's Share=1000012000=56

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:

36000010.8(30000+x)=56

Cross-multiplying to solve for x:

360000×6=5×10.8(<30000+x)

2160000=54(<30000+x)

30000+x=216000054

30000+x=40000

x=40000-30000=10000

Step 5: Calculate the value of 2x.

2x=2×10000=20000

Thus, the value of 2x is 20000.

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