A and B invest in a business with A investing $8000 and B investing $12000. If t

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Question: A and B invest in a business with A investing $8000 and B investing $12000. If they incur a loss of $2000, how much loss does B bear?

Options:

Correct Answer: $1200

Solution:

Total investment = 8000 + 12000 = $20000. B\'s share of loss = (12000/20000) * 2000 = $1200.

A and B invest in a business with A investing $8000 and B investing $12000. If they incur a loss of $2000, how much loss does B bear?

A and B invest in a business with A investing $8000 and B investing $12000. If they incur a loss of $2000, how much loss does B bear?

Step 1: Identify the amount A invested, which is $8000.
Step 2: Identify the amount B invested, which is $12000.
Step 3: Calculate the total investment by adding A's and B's investments: $8000 + $12000 = $20000.
Step 4: Determine the total loss incurred, which is $2000.
Step 5: Calculate B's share of the total investment: B's investment ($12000) divided by total investment ($20000). This gives B's share as 12000/20000.
Step 6: Calculate B's share of the loss by multiplying B's share of the investment (12000/20000) by the total loss ($2000). This results in B's loss: (12000/20000) * 2000.
Step 7: Simplify the calculation: (12000/20000) * 2000 = $1200.
Step 8: Conclude that B bears a loss of $1200.

Proportional Loss Sharing – Understanding how losses are shared based on the proportion of investment.
Investment Ratios – Calculating the ratio of individual investments to total investments.