Multiple choice

In a business, A invests 6000 for 1yr and B invests 8000 for 6months. Find the ratio of their profit sharing.

  1. 3:2

  2. 3:4

  3. 2:3

  4. none of the above
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A Correct answer
Explanation

Profit ratio = (Investment A * Time A) : (Investment B * Time B) = (6000 * 12) : (8000 * 6) = 72000 : 48000 = 72 : 48 = 3 : 2.

AI explanation

Using the partnership ratio formula, we multiply each partner's investment by their respective time period to find the profit sharing ratio. For A, the effective capital is 6000 multiplied by 12 months, which equals 72000. For B, the effective capital is 8000 multiplied by 6 months, which equals 48000. The ratio of their profit sharing is 72000 to 48000, which simplifies to 3 to 2.

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