A and B start a business, with A investing the total capital of Rs.50000, on…

2025

 A and B start a business, with A investing the total capital of Rs.50000, on the condition that B pays A interest @ 10% per annum on his half of the capital. A is a working partner and receives Rs.1500 per month from the total profit and any profit remaining is equally shared by both of them. At the end of the year, it was found that the income of A is twice that of B. Find the total profit for the year?

  1. A.

    Rs. 39000

  2. B.

    Rs. 49000

  3. C.

    Rs. 59000

  4. D.

    Rs. 69000

Show answer & explanation

Correct answer: C

In a partnership with a working partner's salary and a private interest payment between partners, total profit is allocated in a fixed order: first the working partner's salary, then any interest owed between partners for an unequal capital contribution, and only the leftover profit is divided in the agreed ratio — here, equally. The 10% interest B pays A is a personal transfer for using half of A's invested capital; it is separate from the profit-sharing split.

  1. A's annual salary, paid from the total profit before any split: Rs. 1,500 × 12 = Rs. 18,000.

  2. Interest B pays A for using half of A's capital: 10% of (Rs. 50,000 ÷ 2) = 10% of Rs. 25,000 = Rs. 2,500 per year.

  3. Let the total profit be P. After A's salary is paid, the remaining profit P − 18,000 is shared equally, so each partner's share is (P − 18,000) ÷ 2 — call this share S.

  4. A's total income = salary + share + interest received = 18,000 + S + 2,500.

  5. B's total income = share alone = S (the equal-sharing clause applies only to the remaining profit).

  6. Given A's income is twice B's income: 18,000 + S + 2,500 = 2S, so 20,500 + S = 2S, giving S = 20,500.

  7. Remaining profit = 2S = 41,000, so total profit P = 41,000 + 18,000 = Rs. 59,000.

Cross-check: with total profit Rs. 59,000, each partner's equal share of the remaining profit is Rs. 20,500. A's income = 18,000 (salary) + 20,500 (share) + 2,500 (interest received) = Rs. 41,000. B's income = Rs. 20,500 (share only). Indeed 41,000 is exactly twice 20,500, confirming the total profit is Rs. 59,000.

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