Question : Two businessmen A and B, invest in a business in the ratio of 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?
Option 1: 2,27,000
Option 2: 2,50,000
Option 3: 3,75,000
Option 4: 3,25,000
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Correct Answer: 3,25,000
Solution :
Reinvested amount = 30% of total profit
⇒ Remaining profit to be distributed = 70% of total profit
The ratio of investment of A and B = 5 : 8
So, the profit ratio of A and B = 5 : 8
A's share in the profit = Rs. 87500
⇒ 87500 = profit ratio of A × remaining profit
= $\frac{5}{5+8}$ × 70% of total profit
= $\frac{5×70 }{13×100}$ × total profit
⇒ Total profit = $\frac{87500×13×100 }{5×70}$ = 12500 × 26 = Rs. 325000
Hence, the correct answer is 3,25,000.
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