A and B invest in a business with investments of $15,000 and $25,000 respectivel

A and B invest in a business with investments of $15,000 and $25,000 respectively. If the total profit is $20,000, how much does A receive?

A and B invest in a business with investments of $15,000 and $25,000 respectively. If the total profit is $20,000, how much does A receive?

Correct Answer: $7,500

Step 1: Identify the investments of A and B. A invests $15,000 and B invests $25,000.
Step 2: Calculate the total investment by adding A's and B's investments together: $15,000 + $25,000 = $40,000.
Step 3: Determine the ratio of A's investment to the total investment. A's investment is $15,000, so the ratio is 15000:40000.
Step 4: Simplify the ratio 15000:40000. Divide both numbers by 5000 to get 3:8.
Step 5: Calculate A's share of the total profit. The total profit is $20,000. A's share is (3/8) of $20,000.
Step 6: Perform the calculation: (3/8) * 20000 = 7500.
Step 7: Conclude that A receives $7,500 from the total profit.

Investment Ratio – Understanding how to calculate the ratio of investments made by different parties.
Profit Sharing – Calculating each party's share of the total profit based on their investment ratio.