Question
A and B started a business with initial investments of
Rs. 13000 and Rs. 20000 respectively. After one year, a profit of Rs. 8250 is earned. A being a working partner gets 28% 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 20% compound interest compounded annually. Find the interest earned by A after 2 years.Solution
The ratio of their investments = 13000:20000 = 13:20 Profit share of A for being a working partner = 0.28 × 13000 = Rs. 2310 Profit share of A for his investment = 13/33 × 0.72 × 8250 = Rs. 2340 Total profit of A = Rs. 2340 Compound interest earned by A = 4650{(1 + 0.20)2 – 1} = Rs. 2046
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