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Two businessmen A and B invest in a business in the ratio 5 ∶ 8. They decided to reinvest 30% of the profit they earned back into the business. The remaining profit they distributed amongst themselves. If A's share of the profit was Rs. 87,500 then how much profit (in Rs.) did the business make?

Two businessmen A and B invest in a business in the ratio 5 ∶ 8. They decided to reinvest 30% of the profit they earned back into the business. The remaining profit they distributed amongst themselves. If A's share of the profit was Rs. 87,500 then how much profit (in Rs.) did the business make? Correct Answer 325000

Given:

The ratio of investment of A and B = 5 : 8

The reinvestment amount = 30% of profit earned

A's share of the profit = Rs. 87,500

Concept used:

The ratio of profit distribution = The ratio of investment distribution

Calculation:

Let us take the total profit = P

Since they decided to reinvest the 30% profit so the remaining profit that is been distributed = 0.7P

A's share in the profit = 87500

⇒ 5/13 × 0.7P = 87500

⇒ 7P/26 = 87500

⇒ P = Rs. 325000

∴ The total profit is Rs. 325000.

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