MBApyq

Profit sharing and investment

CAT 2021 Slot 2 · Quantitative Ability · Hard · Profit & Loss

This is a hard Quantitative Ability question from the CAT 2021 Slot 2 paper. It tests Profit & Loss. The full answer key and a step-by-step explanation are below — try it yourself first, then reveal the solution.

All CAT 2021 Slot 2 questionsMore Profit & Loss questionsAll CAT QA

Anil, Bobby and Chintu jointly invest in a business and agree to share the overall profit in proportion to their investments. Anil's share of investment is 70%. His share of profit decreases by ₹ 420 if the overall profit goes down from 18% to 15%. Chintu's share of profit increases by ₹ 80 if the overall profit goes up from 15% to 17%. The amount, in INR, invested by Bobby is

  1. A.

    2400

  2. B.

    2200

  3. C.

    2000

  4. D.

    1800

Answer

C

Explanation

Let total investment be II. Anil's investment = 0.7I0.7I.

When profit rate changes from 18% to 15% (a decrease of 3%), Anil's profit decreases by ₹ 420: 0.7I×3%=4200.7I \times 3\% = 420 0.7I×0.03=420  ⟹  0.021I=420  ⟹  I=200000.7I \times 0.03 = 420 \implies 0.021 I = 420 \implies I = 20000

When overall profit increases from 15% to 17% (an increase of 2%), Chintu's profit increases by ₹ 80: Chintu’s investment fraction×20000×2%=80\text{Chintu's investment fraction} \times 20000 \times 2\% = 80 Chintu’s investment×0.02=80  ⟹  Chintu’s investment=4000\text{Chintu's investment} \times 0.02 = 80 \implies \text{Chintu's investment} = 4000

Bobby's investment = Total Investment - Anil's investment - Chintu's investment =20000−14000−4000=2000= 20000 - 14000 - 4000 = 2000.

Related Profit & Loss questions

Practise this under exam conditions

Sign in to solve it with a live timer, the on-screen CAT calculator, and streak and accuracy tracking across every question you attempt.

Solve in the workspace