Gautam started a business with a sum of Rs. 60,000/-. Jatin joined him 8 months later with a sum of Rs. 35,000/-. At what respect…

Question

Gautam started a business with a sum of Rs. 60,000/-. Jatin joined him 8 months later with a sum of Rs. 35,000/-. At what respective ratio will the two share the profit after two years?

1. A. 2:1
2. B. 3:1
3. C. 18:7 (Correct answer)
4. D. 37:14

Correct Answer

Option C — 18:7

Detailed Solution & Explanation

The correct answer is 18:7.

Key Points

• Profit in a partnership is shared in the ratio of capital × time.
• Gautam invested Rs. 60,000 for the full 24 months: 60000 × 24 = 14,40,000.
• Jatin joined 8 months later, so he invested Rs. 35,000 for 16 months: 35000 × 16 = 5,60,000.
• Ratio = 1440000 : 560000 = 144 : 56 = 18 : 7.

Additional Information

• Partnership profits are divided in the ratio of capital × time, so a partner joining late has their capital weighted by fewer months.
• Where all partners invest for the same duration, the time factor cancels and profit is shared in the simple ratio of capitals — this is called a *simple partnership*, as against a *compound partnership* where durations differ.
• If a partner also manages the business, any salary or commission is deducted from the profit first, and only the remainder is divided in the capital-time ratio.