A and B started a business with initial investments of Rs. 28000 and Rs. 35000 respectively. After one year, a profit of Rs. 10000 is earned. A being a working partner gets 10% 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 12% compound interest compounded annually. Find the interest earned by A after 2 years.
The ratio of their investments = 28000:35000 = 4:5 Profit share of A for being a working partner = 0.10 × 10000 = Rs. 1000 Profit share of A for his investment = 26/27 × 0.84 × 10000 = Rs. 4000 Total profit of A = Rs. 4000 Compound interest earned by A = 5000{(1 + 0.12)2 – 1} = Rs. 1272
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