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A and B started a business with investments of $10,000 and $15,000 respectively.

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Question: A and B started a business with investments of $10,000 and $15,000 respectively. What is the ratio of their profits after one year?

Options:

  1. 2:3
  2. 3:2
  3. 5:3
  4. 3:5

Correct Answer: 2:3

Solution: 

The ratio of their investments is 10000:15000 = 2:3. Therefore, the profit ratio is also 2:3.

A and B started a business with investments of $10,000 and $15,000 respectively.

Practice Questions

Q1
A and B started a business with investments of $10,000 and $15,000 respectively. What is the ratio of their profits after one year?
  1. 2:3
  2. 3:2
  3. 5:3
  4. 3:5

Questions & Step-by-Step Solutions

A and B started a business with investments of $10,000 and $15,000 respectively. What is the ratio of their profits after one year?
Correct Answer: 2:3
  • Step 1: Identify the amount A invested, which is $10,000.
  • Step 2: Identify the amount B invested, which is $15,000.
  • Step 3: Write the investments as a ratio: A's investment to B's investment is 10000:15000.
  • Step 4: Simplify the ratio 10000:15000 by dividing both numbers by 5000.
  • Step 5: After simplification, the ratio becomes 2:3.
  • Step 6: Since profits are shared based on the investment ratio, the profit ratio will also be 2:3.
  • Investment Ratio – The ratio of investments made by partners A and B, which determines their share of profits.
  • Profit Sharing – The principle that profits are shared in proportion to the investments made by each partner.
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