Question:

Arun starts a business with Rs. 8000 and Avinash joined him after 6 months with an investment of Rs. 40000. What will be the ratio of the profits of Arun and Avinash at the end of the year?

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Profit shares depend on both the invested amount and the duration of investment; multiply them to get the ratio.
Updated On: Jun 6, 2025
  • 2:5
  • 1:5
  • 5:2
  • 5:1
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The Correct Option is A

Solution and Explanation

Step 1: Understand profit sharing in partnership
Profits are shared in the ratio of the product of investment amount and time for which the money was invested.
Step 2: Calculate Arun's investment-time product
- Investment = Rs 8000
- Time = 12 months (since started at beginning)
\[ 8000 \times 12 = 96000 \] Step 3: Calculate Avinash's investment-time product
- Investment = Rs 40000
- Time = 6 months (joined after 6 months)
\[ 40000 \times 6 = 240000 \] Step 4: Ratio of profits
\[ \text{Arun} : \text{Avinash} = 96000 : 240000 = 2 : 5 \] Thus, Option (A) 2:5 is correct.
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