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A, B and C are partners. A receives 2/3 of profit, B and C
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15 Apr 2019, 06:21
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Difficulty:
55% (hard)
Question Stats:
63% (02:47) correct 38% (03:06) wrong based on 40 sessions
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A, B and C are partners. A receives 2/3 of profit, B and C dividing the remaining profit equally. A's income is increased by $400 when the rate of profit rises from 5% to 7%. Find the profit of B
A, B and C are partners. A receives 2/3 of profit, B and C
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15 Apr 2019, 06:31
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jackfr2 wrote:
A, B and C are partners. A receives 2/3 of profit, B and C dividing the remaining profit equally. A's income is increased by $400 when the rate of profit rises from 5% to 7%. Find the profit of B
New Profit = 7% of 100x = 7x i..e. Now A's profit = (2/3)*7x
Change in A's profit = (2/3)*7x - (2/3)*5x = (4/3)x
Given, (4/3)*x = $400
i.e. x = $300
B's profit = (1/6)*7x = 7*300/6 = $350
Answer: Option C
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A, B and C are partners. A receives 2/3 of profit, B and C
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Updated on: 15 Apr 2019, 09:33
jackfr2 wrote:
A, B and C are partners. A receives 2/3 of profit, B and C dividing the remaining profit equally. A's income is increased by $400 when the rate of profit rises from 5% to 7%. Find the profit of B
a. $600 b. $850 c. $350 d. $1100 e. $2100
Posted from my mobile device
let profit be x so for A given profit is 2/3 it receives so 1.07x*2/3-1.05x*2/3 = 400 or say 2x*.02 =1200 x= 30,000 now we need to determine profit of B @ 7% so 0.07*30,000 * 1/3* 1/2 = 350$ IMO C
Originally posted by Archit3110 on 15 Apr 2019, 07:57.
Last edited by Archit3110 on 15 Apr 2019, 09:33, edited 1 time in total.
Re: A, B and C are partners. A receives 2/3 of profit, B and C
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15 Apr 2019, 09:24
1
Archit3110 wrote:
jackfr2 wrote:
A, B and C are partners. A receives 2/3 of profit, B and C dividing the remaining profit equally. A's income is increased by $400 when the rate of profit rises from 5% to 7%. Find the profit of B
a. $600 b. $850 c. $350 d. $1100 e. $2100
Posted from my mobile device
let profit be x so for A given profit is 2/3 it receives so 1.07x*2/3-1.05x*2/3 = 400 or say 2x*.02 =1200 x= 30,000 so A share ; 30,000 * 2/3 = 20,000 left with 10,000 which is shared equally ; 5,000 each GMATinsight ; sir where am I going wrong ? I did not assume value of interest like in your case , i solved using variables not sure where i got solution wrong please advise..
There are more than one mistake
if x is the profit in first case then 1.05x has no meaning as x itself must be 5% of cost that's why I started with assumption of cost as 100x and not profit.
second mistake is that the initial profit sharing of B is not what question is asking. Question is asking the later profit sharing of B
i.e. 0.07x is the profit in later case as per your calculation assuming that x is the cost
0.07x*(1/3)*(1/2) is teh profit sharing of B = (7/100)*(1/6)*30000 = $350
Prosper!!! GMATinsight Bhoopendra Singh and Dr.Sushma Jha e-mail: info@GMATinsight.com I Call us : +91-9999687183 / 9891333772 Online One-on-One Skype based classes and Classroom Coaching in South and West Delhi http://www.GMATinsight.com/testimonials.html
Re: A, B and C are partners. A receives 2/3 of profit, B and C
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15 Apr 2019, 09:30
GMATinsight ; thanks a lot sir, understood where I went wrong... wording of question was little tricky especially end part ...
GMATinsight wrote:
Archit3110 wrote:
jackfr2 wrote:
A, B and C are partners. A receives 2/3 of profit, B and C dividing the remaining profit equally. A's income is increased by $400 when the rate of profit rises from 5% to 7%. Find the profit of B
a. $600 b. $850 c. $350 d. $1100 e. $2100
Posted from my mobile device
let profit be x so for A given profit is 2/3 it receives so 1.07x*2/3-1.05x*2/3 = 400 or say 2x*.02 =1200 x= 30,000 so A share ; 30,000 * 2/3 = 20,000 left with 10,000 which is shared equally ; 5,000 each GMATinsight ; sir where am I going wrong ? I did not assume value of interest like in your case , i solved using variables not sure where i got solution wrong please advise..
There are more than one mistake
if x is the profit in first case then 1.05x has no meaning as x itself must be 5% of cost that's why I started with assumption of cost as 100x and not profit.
second mistake is that the initial profit sharing of B is not what question is asking. Question is asking the later profit sharing of B
i.e. 0.07x is the profit in later case as per your calculation assuming that x is the cost
0.07x*(1/3)*(1/2) is teh profit sharing of B = (7/100)*(1/6)*30000 = $350
A, B and C are partners. A receives 2/3 of profit, B and C
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16 Apr 2019, 02:44
jackfr2 wrote:
A, B and C are partners. A receives 2/3 of profit, B and C dividing the remaining profit equally. A's income is increased by $400 when the rate of profit rises from 5% to 7%. Find the profit of B
a. $600 b. $850 c. $350 d. $1100 e. $2100
Posted from my mobile device
In order to determine the ratio in which the profit is split, we can assume a simple number to be the total profit. Let that be $300 - A will receive \(\frac{2}{3}*300 = $200\) B and C get an equal share of the remaining $100. Ratio of profits is 4:1:1
We are told that for a 2% increase in profit, the income of A increases by $400. Tthe total income of the partners increases by $600(ratio is 4:1:1). The total amount on which the profit is generated is \(\frac{$600}{2}*100 = $30000\).
Therefore, the total profit that B takes home is \(\frac{1}{6}*\frac{7}{100}*30000\) = $350(Option C) _________________
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63% (02:47) correct 
I did not assume value of interest like in your case , i solved using variables not sure where i got solution wrong please advise..
