Question

A, B and C became partners in a business by investing money in the ratio of 5:7:6. Next year, they increased their investments by 26%, 20% and 15% respectively. In what ratio should profit earned during 2nd year be distributed?

• A. 21 : 28 : 23
• B. 23 : 28 : 21
• C. 28 : 23 : 21
• D. 35 : 41 : 7

Hint:

When partners increase investments by percentages, multiply original investments by \((1 + \frac{\text{percentage}}{100})\) and then find the new ratio.

Answer 1

The Correct Option is A

Initial investment ratios: \(5 : 7 : 6\)
Increase in investments:
- A: \(5 \times 1.26 = 6.3\)
- B: \(7 \times 1.20 = 8.4\)
- C: \(6 \times 1.15 = 6.9\)
Ratio of investments in 2nd year:
\[ 6.3 : 8.4 : 6.9 = 63 : 84 : 69 \] Divide each by 3:
\[ 21 : 28 : 23 \] Thus, profit should be distributed in the ratio \(\boxed{21 : 28 : 23}\).