Sekar started a business investing Rs.25,000 in 1999. In 2000, he invested an…
2024
Sekar started a business investing Rs.25,000 in 1999. In 2000, he invested an additional amount of Rs. 10,000 and Rajeev joined him with an amount of Rs. 35,000. In 2001, Sekar invested another additional amount of Rs.10,000 and Jatin joined them with an amount of Rs.35,000. What will be Rajeev's share in the profit of Rs.1,50,000 earned at the end of 3 years from the start of the business in 1999?
- A.
Rs. 45000
- B.
Rs. 50000
- C.
Rs. 70000
- D.
Rs. 75000
Show answer & explanation
Correct answer: B
Concept: In a partnership with partners investing different capitals for different durations, each partner's share of the profit is proportional to the product of the capital invested and the time for which it stayed invested (capital × time = investment-units). The profit is divided in the ratio of these investment-units, not in the ratio of the capital alone.
Application:
Sekar invested Rs. 25,000 in 1999, took it to Rs. 35,000 in 2000, and to Rs. 45,000 in 2001, each amount held for one year. His investment-units = 25,000 × 1 + 35,000 × 1 + 45,000 × 1 = 1,05,000.
Rajeev joined in 2000 with Rs. 35,000 and stayed invested for the remaining 2 years (2000 and 2001). His investment-units = 35,000 × 2 = 70,000.
Jatin joined in 2001 with Rs. 35,000 and stayed invested for 1 year. His investment-units = 35,000 × 1 = 35,000.
Total investment-units = 1,05,000 + 70,000 + 35,000 = 2,10,000.
Rajeev's ratio = 70,000 / 2,10,000 = 1/3, so his share = (1/3) × Rs. 1,50,000 = Rs. 50,000.
Cross-check: Sekar's ratio 1,05,000/2,10,000 = 1/2 gives Rs. 75,000, and Jatin's ratio 35,000/2,10,000 = 1/6 gives Rs. 25,000. Adding all three shares: 75,000 + 50,000 + 25,000 = 1,50,000, which equals the total profit — confirming the split is correct.