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.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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