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A, B and C are partners. A receives 2/3 of profits, B and C dividing the remainder equally. A's income is increased by Rs.200 when the rate to profit rises from 5 to 7 percent. Find the Capital of B?

Correct answer: C. Rs.2500

  • A. Rs.2450
  • B. Rs.3600
  • C. Rs.2500
  • D. Rs.3100

Explanation

When the profit rate rises by 7% - 5% = 2%, A's increase is two-thirds of 2% of the total capital. Thus (2/3) x (2/100) x total capital = Rs.200, so total capital = Rs.15000. Since A receives 2/3 of profit and B and C divide the remaining 1/3 equally, their capital ratio is 4:1:1, making B's capital Rs.15000/6 = Rs.2500. The likely mistake is option b, Rs.3600, which does not use the equal division between B and C.

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