Question

    A and B started a business with initial investments of

    Rs. 28000 and Rs. 30000 respectively. After one year, a profit of Rs. 5800 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 10% compound interest compounded annually. Find the interest earned by A after 2 years.
    A Rs. 977 Correct Answer Incorrect Answer
    B Rs. 877 Correct Answer Incorrect Answer
    C Rs. 777 Correct Answer Incorrect Answer
    D Rs. 677 Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    The ratio of their investments = 28000:30000 = 14:15 Profit share of A for being a working partner = 0.30 times; 5800= Rs. 1740 Profit share of A for his investment = 14/29 times; 0.70 times; 5800 = Rs. 1960 Total profit of A = Rs. 1960 Compound interest earned by A = 3700{(1 + 0.10)2ndash; 1} = Rs. 777

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