|
|
GMAT Club Daily Prep
Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.
Customized
for You
Track
Your Progress
Practice
Pays
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
16 Nov 2023, 20:53
Kudos
Bookmarks
A
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
(N/A)
Question Stats:
0% (00:00) correct
100%
(00:09)
wrong
based on 1
sessions
History
Date
Time
Result
Not Attempted Yet
A and B started a business with initial investments in the respective ratio of 18:7. After four months from the start of the business, A invested $ 2000 more and B invested $ 7000 more each month. At the end of one year, if the profit was distributed among them in the ratio of 2:1 respectively. What was the total initial investment with which A and B started the business?
A) $ 50,000
B) $ 225,000
C) $1,50,000
D) $ 75,000
A) $ 50,000
B) $ 225,000
C) $1,50,000
D) $ 75,000
17 Jun 2025, 21:52
Kudos
Bookmarks
Let A's initial investment = 18x and B's initial investment = 7x
For the first 4 months:
A's investment = 18x for 4 months
B's investment = 7x for 4 months
After 4 months, A invested $2000 more and B invested $7000 more each month for the remaining 8 months.
For the next 8 months: A's investment = (18x + 2000) for 8 months B's investment = (7x + 7000) for 8 months
Total investment-time for A = 18x × 4 + (18x + 2000) × 8 = 72x + 144x + 16000 = 216x + 16000
Total investment-time for B = 7x × 4 + (7x + 7000) × 8 = 28x + 56x + 56000 = 84x + 56000
Given that profit is distributed in ratio 2:1, the investment ratio should also be 2:1
So: (216x + 16000)/(84x + 56000) = 2/1
216x + 16000 = 2(84x + 56000)
216x + 16000 = 168x + 112000
216x - 168x = 112000 - 16000
48x = 96000
x = 2000
Therefore:
A's initial investment = 18x = 18 × 2000 = $36000
B's initial investment = 7x = 7 × 2000 = $14000
Total initial investment = $36000 + $14000 = $50000
The answer is A) $50,000
For the first 4 months:
A's investment = 18x for 4 months
B's investment = 7x for 4 months
After 4 months, A invested $2000 more and B invested $7000 more each month for the remaining 8 months.
For the next 8 months: A's investment = (18x + 2000) for 8 months B's investment = (7x + 7000) for 8 months
Total investment-time for A = 18x × 4 + (18x + 2000) × 8 = 72x + 144x + 16000 = 216x + 16000
Total investment-time for B = 7x × 4 + (7x + 7000) × 8 = 28x + 56x + 56000 = 84x + 56000
Given that profit is distributed in ratio 2:1, the investment ratio should also be 2:1
So: (216x + 16000)/(84x + 56000) = 2/1
216x + 16000 = 2(84x + 56000)
216x + 16000 = 168x + 112000
216x - 168x = 112000 - 16000
48x = 96000
x = 2000
Therefore:
A's initial investment = 18x = 18 × 2000 = $36000
B's initial investment = 7x = 7 × 2000 = $14000
Total initial investment = $36000 + $14000 = $50000
The answer is A) $50,000
Moderator:
