A and B invest ₹50,000 and ₹70,000 respectively in a business. After 1 year, the total profit is distributed including simple interest at 10% per annum on the capital of each partner. If the total profit including interest is ₹18,000, what is A’s share of the profit?

Correct — B. Pay the interest on capital first, then split what is left in the capital ratio.

A's interest: 10% of 50,000 = ₹5,000
B's interest: 10% of 70,000 = ₹7,000
Total interest: 5,000 + 7,000 = ₹12,000

Remainder: 18,000 − 12,000 = ₹6,000
Capital ratio A : B = 50,000 : 70,000 = 5 : 7
A's part: 6,000 × 5⁄12 = ₹2,500

A's share: 5,000 + 2,500 = ₹7,500 → option (b)

Why the others are wrong

• (a)
  ₹7,000 — ₹7,000 is B's interest on capital, 10% of ₹70,000. A's own interest is ₹5,000, and adding A's ₹2,500 of the remainder gives ₹7,500.
• (c)
  ₹8,000 — ₹8,000 splits the ₹6,000 remainder equally, ₹3,000 each. The remainder is shared in the capital ratio 5 : 7, which gives A ₹2,500, not ₹3,000.
• (d)
  ₹8,500 — ₹8,500 adds B's part of the remainder to A's interest: 5,000 + 3,500. A's part is 5⁄12 of ₹6,000 = ₹2,500, so A gets ₹7,500.

Interest on capital is paid to each partner before the profit is shared, and only the remainder is divided. With no other ratio given, partnership sums divide it in the ratio of capital × time, and time here is the same year for both.

That makes two slices for A: ₹5,000 of interest and 5⁄12 of the ₹6,000 left over.

Key facts

• Interest on capital is paid first, and the remaining profit is shared afterwards.
• 50,000 : 70,000 = 5 : 7, so A takes 5⁄12 of the ₹6,000 remainder = ₹2,500.
• A's total: ₹5,000 + ₹2,500 = ₹7,500, and B's: ₹7,000 + ₹3,500 = ₹10,500, which together make ₹18,000.

Common traps

• Splitting the remainder equally, which gives A ₹8,000.
• Adding B's ₹3,500 of the remainder to A's interest, which gives ₹8,500.
• Reporting an interest figure, ₹5,000 or ₹7,000, as A's whole share.

No directly related past PYQ was found.