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    Question

    A and B started a business with initial investments of

    Rs. 12000 and Rs. 28000 respectively. After one year, a profit of Rs. 8000 is earned. A being a working partner gets 25% 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.
    A Rs. 1225.5 Correct Answer Incorrect Answer
    B Rs. 1205.5 Correct Answer Incorrect Answer
    C Rs. 1025.5 Correct Answer Incorrect Answer
    D Rs. 1200.5 Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    The ratio of their investments = 12000:28000 = 3:7 Profit share of A for being a working partner = 0.25 times; 8000= Rs. 2000 Profit share of A for his investment = 3/10 times; 0.75 times; 8000 = Rs. 1800 Total profit of A = Rs. 1800 Compound interest earned by A = 3800{(1 + 0.15)2 ndash; 1} = Rs. 1225.5

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