Partnership

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When the word Partnership is used, the first thing which comes to our mind is business between two people. In a partnership, two(or more) people invest their money to start a certain business together.

The starting money which they invest in the business is called as the initial investment(normally referred as investment). In a partnership, entire profit and loss is divided between all the partners in the ratio of their investments.

These are some tooltips that can be used to solve questions on Partnerships:

Tooltip 1: In a partnership if money is invested for the same time period then that partnership is known as the simple partnership.

In a simple partnership, the profit or loss is divided between the numbers of investors in the ratio of their investments.

Example 1: Nitin and Mohit invested Rs. 2000 and Rs. 3000 respectively in some business. At the end of the year they made a loss of Rs. 1500. What is Mohit’s share of loss ?
Solution: Investment by Mohit and Nitin = 3000 and 2000 respectively
Ratio of their investment = 3:2
So we have discussed that if the time period is same then the loss or profit is shared between the partners in the ratio of their investment.
So Rs. 1500 will be divided in the ratio of 3:2
So the share of Nitin will be 2/5×1500 = Rs. 600
And the share of Mohit will be = 3/5 x 1500 = Rs. 900

Let’s take another example.
Example 2: Meera, Richa, Upasna invested some money in their business in ratio of 3:4:7. If their annual profit was 4200 then what will be the Richa’s share?
Solution: Money invested in the ratio of 3 : 4 : 7
Annual profit was = Rs. 4200
So the money will be shared in the ratio of investment
So Richa’s share i will be 4/14 x 4200 = Rs. 1200

Tooltip 2: If the money is invested for different time periods then that partnership is called a compound partnership.

In a compound investment, the profit or loss is divided between the numbers of investors in the ratio product of their investments and time of period they invested their money for.

Example 1: Nitika , Sona , Richa rented a set of DVDs at a rent of Rs. 578 .If they use d it for 4,6,7 hours respectively , what will be the Sona ‘s share of rent ?

Solution: Rent (total) = Rs. 578
Time taken is in ratio of 4:6:7
So the share of all will be
Nitika’s share = 4/17×578 = Rs. 136
Sona’s share = 6/17 x 578 = Rs. 204
And Richa’s share = 7/17 x 578 = Rs. 238

Example 2: Atish started the business by investing Rs. 100000. After one year , Ankraj joined with him by investing Rs. 200000 . At the end of 3 year from the date their began, they earned the profit of Rs. 84000.How much more is received by Ankraj than Atish ?

Solution :
Investment of Atish = 100000 for 3 years
Investment of Ankraj = 200000 for 2 years
Total profit is = Rs. 84000
Since they invested different amount for the different interval of time
So the ratio of their investment = atish : ankraj = 300000 : 400000 = 3:4
Total profit = Rs. 84000
So the share of profit also divided into 3:4
So share of Atish = 3/7 x 84000 = Rs. 36000
And the share of Ankraj = 4/7 x 84000 = Rs. 48000
So Ankraj got Rs. 12000 more than the Atish