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    Question

    A and B started a business with initial investments of

    Rs. 26000 and Rs. 27000 respectively. After one year, a profit of Rs. 10600 is earned. A being a working partner gets 16% of the profit for managing the business and rest of the profit is shared between them in the ratio of their investments. A invested his whole profit in a scheme offering 10% compound interest compounded annually. Find the interest earned by A after 2 years.
    A Rs. 1073.44 Correct Answer Incorrect Answer
    B Rs. 1203.44 Correct Answer Incorrect Answer
    C Rs. 1273.44 Correct Answer Incorrect Answer
    D Rs. 1270.40 Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    The ratio of their investments = 26000:27000 = 26:27 Profit share of A for being a working partner = 0.16 times; 10600= Rs. 1696 Profit share of A for his investment = 26/27 times; 0.84 times; 10600 = Rs. 4368 Total profit of A = Rs. 4368 Compound interest earned by A = 6064{(1 + 0.10)2ndash; 1} = Rs. 1273.44

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