Question
‘M’ began a business by investing a certain amount.
After 6 months, ‘N’ joined with Rs. 800 more than M. If their profit sharing ratio at the year-end is 3:4 respectively, find M’s investment.Solution
ATQ,
Let M’s investment = Rs. Y
Then N’s investment = Rs. (Y + 800)
Profit ratio = (Y × 12) : {(Y + 800) × 6}
ATQ,
(Y × 12) ÷ {(Y + 800) × 6} = 3/4
=> 12Y × 4 = 3 × (6Y + 4,800)
=> 48Y = 18Y + 14,400
=> 30Y = 14,400
=> Y = 14,400 ÷ 30 = Rs. 480
Therefore, M’s initial investment = Rs. 480
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