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Partnership

Questions based on partnership

Partnership questions are regular in competitive exams like IBPS,UPSC,SSC,CAT,MAT and other eligibility tests. Usually this section is simple and you can score easily by understanding basic partnership concepts and formulas.

Partnership Important formulas and points to remember

When two or more than two persons jointly run a business , it is called partnership and persons involved are partners
1.Division of profit/loss is always proportional to investment.
2. When all the partners invest for the same time, the profit or loss is distributed among the partners in the ratio of their investments.
Suppose A and B invest Rs. x and Rs. y respectively for a year in a business, then at the end of the year:
(A's share of profit) / (B's share of profit) = x / y.
3. When investments are for different time periods, then equivalent capitals are calculate.Suppose A invests Rs. x for a period m and B invests Rs. y for a period n then,
(A's profit) /(B's profit)= mx/ny

Question1.A, B and C together invested Rs. 1,00,000 for a business. A sinvested Rs. 8000 more than B and B Rs. 10000 more than C. Out of a total profit of Rs. 70,000, A receives:
  • A.32000
  • B.42000
  • C.25800
  • D.24000
  • E.29400
Let x be the investment of C.
Then, B's investment = x + 10000
A's investment = x + 10000 + 8000 = x + 18000.
( x + x + 10000 + x + 18000) = 100000
3x = (100000-28000)=72000
x = 24000
A : B : C = 42000 : 34000 : 24000 = 42 : 34 : 24=21:17:12
A's share = Rs.[70000*(21/(21+17+12))]=70000*(21/50)=Rs. 29,400

Question2.A and B enter into a business in which A invest money four times than that of B. After a year A withdraws Rs.2000 while B doubles his money .They earn profits at 5% per annum of their capitals. At the end of the second year B gets Rs.600 as profit. Find the profit obtained by A. 
  • A. Rs.1200 
  • B. Rs.5000 
  • C.Rs.7000
  • D.Rs.5500 
  • E.None of these 
Ans.E.
Profit of Rs.600 at 5% per annum will be on investment= 600*(100/5)= 12000.
Therefore total investment of B for both years= Rs.12000.
Let investment of B in first year is x ,then x + 2x =12000 => x=4000
Investment of B for first year = 4000 and that of second year=8000.
Investment of A for first year= 4 * investment of b for first year= 4*4000=16000.
Investment of B for second year= 16000-2000=14000.
Total investment of A for two years= 16000+14000=30000.
So, profit of A= 30000*(5/100)=1500.

Question3.Three partners shared the profit in a business in the ratio 5 : 7 : 8. They had partnered for 14 months, 8 months and 7 months respectively. What was the ratio of their investments?
  • A. 5 : 7 : 8
  • B. 20 : 49 : 64
  • C. 38 : 28 : 21
  • D . 98:40:35
  • E. None of these
Answer:Option B
Explanation:
Let their investments be Rs. x for 14 months, Rs. y for 8 months and Rs. z for 7 months respectively.
Then, 14x : 8y : 7z = 5 : 7 : 8.
14x/8y=5/7
=>y=(14x/8)(7/5)=98x/40
14x/7z=5/8
=>z=(14x/7)(8/5)=112x/35
Therefore,  x : y : z=x: 98x/40: 112x/35
=1:98/40:112/35=20:49:64
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