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A and B invest in a business with A investing $8,000 and B investing $12,000. If

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Question: A and B invest in a business with A investing $8,000 and B investing $12,000. If they make a profit of $40,000, how much does B receive?

Options:

  1. $16,000
  2. $24,000
  3. $20,000
  4. $12,000

Correct Answer: $24,000

Solution: 

B\'s share = (B\'s investment / Total investment) * Total profit = (12000 / 20000) * 40000 = $24,000.

A and B invest in a business with A investing $8,000 and B investing $12,000. If

Practice Questions

Q1
A and B invest in a business with A investing $8,000 and B investing $12,000. If they make a profit of $40,000, how much does B receive?
  1. $16,000
  2. $24,000
  3. $20,000
  4. $12,000

Questions & Step-by-Step Solutions

A and B invest in a business with A investing $8,000 and B investing $12,000. If they make a profit of $40,000, how much does B receive?
  • Step 1: Identify A's investment, which is $8,000.
  • Step 2: Identify B's investment, which is $12,000.
  • Step 3: Calculate the total investment by adding A's and B's investments: $8,000 + $12,000 = $20,000.
  • Step 4: Identify the total profit made by the business, which is $40,000.
  • Step 5: Calculate B's share of the profit using the formula: (B's investment / Total investment) * Total profit.
  • Step 6: Substitute B's investment and total investment into the formula: (12,000 / 20,000) * 40,000.
  • Step 7: Simplify the fraction: 12,000 / 20,000 = 0.6.
  • Step 8: Multiply 0.6 by the total profit: 0.6 * 40,000 = $24,000.
  • Step 9: Conclude that B receives $24,000.
  • Profit Sharing – Understanding how profits are distributed based on the proportion of investment.
  • Ratio Calculation – Calculating shares based on the ratio of individual investments to total investments.
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