A and B invest in a business in the ratio of 1:4. If the total profit is $5000,

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Question: A and B invest in a business in the ratio of 1:4. If the total profit is $5000, how much does A receive?

Options:

Correct Answer: $1000

Solution:

Total parts = 1 + 4 = 5. A\'s share = (1/5) * 5000 = $1000.

A and B invest in a business in the ratio of 1:4. If the total profit is $5000, how much does A receive?

A and B invest in a business in the ratio of 1:4. If the total profit is $5000, how much does A receive?

Step 1: Understand the ratio of investment between A and B, which is 1:4.
Step 2: Calculate the total number of parts in the ratio by adding A's part (1) and B's part (4). So, 1 + 4 = 5 parts.
Step 3: Determine A's share of the profit. Since A's part is 1 out of the total 5 parts, A's share is (1/5).
Step 4: Multiply A's share (1/5) by the total profit ($5000) to find out how much A receives. So, (1/5) * 5000 = $1000.
Step 5: Conclude that A receives $1000 from the total profit.

Ratio and Proportion – Understanding how to divide profits based on the ratio of investments.
Profit Sharing – Calculating individual shares from a total profit based on their investment ratio.