Multiple choice

A and B invest in a business with an initial investment of Rs. 25 lakh each. C joins them after 6 months with an investment of Rs. 50 lakh. At the end of the year, the business earns them a profit of Rs. 24 lakh. If they reinvest the profit in the business, what will be the new ratio of their shares in the business?

  1. 32 : 32 : 59

  2. 33 : 33 : 58

  3. 34 : 34 : 57

  4. 35 : 35 : 54

  5. 36 : 36 : 53
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A and B invest 25 lakh each for 12 months. C invests 50 lakh for 6 months. Ratio of investments: (25*12) : (25*12) : (50*6) = 300 : 300 : 300 = 1 : 1 : 1. The profit is reinvested, so the new capital ratio remains 1:1:1. The options provided do not match this simple ratio, suggesting the profit is added to the capital. New capital: A=25+8=33, B=25+8=33, C=50+8=58. Ratio 33:33:58.

AI explanation

Since the original profit is reinvested for one more year, we first calculate the new profit sharing ratio to find the distribution of the Rs. 24 lakh profit. A and B invested for 12 months while C invested for 6 months, giving an initial profit ratio of (25*12):(25*12):(50*6), which simplifies to 300:300:300 or 1:1:1. This means each person receives Rs. 8 lakh from the profit. The new capital ratio is calculated by adding the distributed profit to their investments: (25+8):(25+8):(50+8), resulting in 33:33:58.

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