Question Details

Arthur, Bianca, and Cyrus enter into a joint business venture. Arthur invests $60,000, Bianca invests $40,000, and Cyrus invests $30,000. After 3 months, Bianca increases her investment by 25%, while Cyrus reduces his investment by 20%. If the total profit earned at the end of 1 year is $133,000, what is Cyrus’s share of the profit?

Options

A

$24,500

B

$26,500

C

$25,500

D

$27,500

Show Answer

Correct Answer :

Option C

$25,500

Rs. 4,86,00023

Solution :

The correct option is $25,500.

To find Cyrus’s share of the total profit, we calculate the effective investment (investment multiplied by duration in months) for each partner over the 1-year (12 months) period.

Step 1: Calculate Arthur's total investment-months

Arthur invests $60,000 for the entire duration of 12 months without making any changes.

Arthur's investment=60000×12=720000

Step 2: Calculate Bianca's total investment-months

For the first 3 months, Bianca invests $40,000.
After 3 months, she increases her investment by 25%:

Increase=25% of 40000=25100×40000=10000

Her new investment for the remaining 9 months is:

New investment=40000+10000=50000

Total investment-months for Bianca:

Bianca's investment=(40000×3)+(50000×9)=120000+450000=570000

Step 3: Calculate Cyrus's total investment-months

For the first 3 months, Cyrus invests $30,000.
After 3 months, he reduces his investment by 20%:

Reduction=20% of 30000=20100×30000=6000

His new investment for the remaining 9 months is:

New investment=300006000=24000

Total investment-months for Cyrus:

Cyrus's investment=(30000×3)+(24000×9)=90000+216000=306000

Step 4: Determine the ratio of profit shares

The ratio of profit share among Arthur, Bianca, and Cyrus is:

Ratio=720000:570000:306000

Simplifying the ratio by dividing each term by 6,000:

Ratio=120:95:51

Sum of the ratio terms:

Total ratio parts=120+95+51=266

Step 5: Calculate Cyrus's share of the profit

Given total profit = $133,000:

Cyrus's share=51266×133000

Dividing 133,000 by 266 gives 500:

Cyrus's share=51×500=25500

Thus, Cyrus’s share of the profit is $25,500.

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