Question
A and B started a business with initial investments of
Rs. 25000 and Rs. 30000 respectively. After one year, a profit of Rs. 11000 is earned. A being a working partner gets 30% of the profit for managing the business and rest of the profit is shared between them in the ratio of their investments. A invested his whole profit in a scheme offering 15% compound interest compounded annually. Find the interest earned by A after 2 years.Solution
The ratio of their investments = 25000:30000 = 5:6 Profit share of A for being a working partner = 0.30 times; 11000 = Rs. 3,300 Profit share of A for his investment = 5/11 times; 0.70 times; 11000 = Rs. 3500 Total profit of A = Rs. 6800 Compound interest earned by A = 6800{(1 + 0.15)2 ndash; 1} = Rs. 2193
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